Next Bank (將來銀行) has allegedly acquired an overpriced IT system developed by its biggest shareholder, Chunghwa Telecom Co (中華電信), despite the doubts of former general manager Liu I-cheng (劉奕成) and the bank’s compliance and financial departments, Chinese Nationalist Party (KMT) Legislator Alex Fai (費鴻泰) said yesterday.
Liu on March 18 resigned over the deal, Fai told a meeting of the legislature’s Finance Committee in Taipei, citing a source at the Web-only bank who objected to the purchase.
Chunghwa Telecom, which holds a 41.9 percent stake in Next Bank, has appointed five directors to the bank’s board, including the telecom’s business group president Wu Li-show (吳麗秀), Fai said.
Photo: Kelson Wang, Taipei Times
Wu allegedly urged the bank to buy a NT$13.78 million (US$484,614) IT system developed by the telecom to address flaws in the bank’s system, Fai said.
The project’s development time totaled 344.5 worker days, priced at NT$40,021 per day, he said.
“That is almost the market price in the US. In Taiwan, the usual price per worker day is NT$3,000 to NT$6,000,” Fai said.
Following an on-site inspection, the Financial Supervisory Commission (FSC) mandated an update to the bank’s system.
However, Next Bank has not opened a public tender, nor has it formally employed the telecom for the task, Fai said, adding that it was unreasoanble for Wu to urge the bank to buy from the telecom.
The bank’s internal rules stipulate that purchases of more than NT$5 million require approval by the board, Fai said, adding that the board did not discuss the matter.
Liu, as well as the bank’s compliance and finance departments, disapproved the deal, but chairman Chung Fu-kuei (鍾福貴) asked to “find ways to address the deal,” Fai said, adding that Chung previously worked for the telecom as president of data communication.
Liu aimed to review the then-proposed purchase at a board meeting in early February, where directors appointed by the telecom and one director appointed by Mega International Commercial Bank (兆豐銀行) pressured Liu to resign, Fai said.
Fai urged the FSC to investigate the matter, saying that his source inside the bank might need protection, “as the bank is already trying to find out who the whistle-blowers are.”
FSC Chairman Thomas Huang (黃天牧) said that the commission received reports from the same source, and that it would investigate whether Next Bank or the telecom have breached regulations or internal controls.
However, Liu said in a statement that he was not pressured to step down, nor did he know of an IT purchase from the telecom.
“The board meeting in February did not discuss the matter,” Liu said.
Next Bank said in a statement that it is still in the procurement process for the improvement of its IT system, adding that it would proceed in line with internal control requirements.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to