The Financial Supervisory Commission (FSC) is conducting a financial examination of Next Bank (將來銀行), a Web-only bank that has not yet begun operations, to see if it acquired an overpriced information technology (IT) system from its largest shareholder, Chunghwa Telecom Co (中華電信), the commission said yesterday.
The commission last week received reports about the deal from a few whistle-blowers, as well as Chinese Nationalist Party (KMT) Legislator Alex Fai (費鴻泰).
It is rare for the commission to inspect banks that have not yet begun operations.
Photo: Peter Lo, Taipei Times
In 2019, the commission said it would not inspect the nation’s three Web-only banks during the early stages of their operations.
“Our staff from the Banking Bureau and the Financial Examination Bureau entered Next Bank’s offices on Monday, and they are working together on the on-site inspection,” FSC Chairman Thomas Huang (黃天牧) told a meeting of the legislature’s Finance Committee in Taipei.
Their progress could not be revealed for the time being, but the inspection would not take longer than a week, Huang said.
The examination is focusing on the bank’s internal controls and compliance with regulations, and would clarify whether the bank had spent NT$13.78 million (US$489,503) on an IT system developed by Chunghwa Telecom, the commission said.
Asked by Fai if they had faced pressure from people at Chunghwa Telecom, Financial Examination Bureau Director-General Chang Tzy-hao (張子浩) and Banking Bureau Director-General Sherri Chuang (莊琇媛) said: “No.”
After Fai made Next Bank’s purchase public last week, many of its 15 board members raised questions about it at a board meeting on Tuesday, even though Next Bank chairman Chung Fu-kuei (鍾福貴) said that the bank had not paid for the system, Fai said yesterday.
Fai urged the commission to obtain the minutes of the meeting and get to the bottom of the issue.
More than 60 percent of Next Bank’s shares are owned by state-run Mega International Commercial Bank (兆豐銀行) and Chunghwa Telecom, in which the government and labor funds hold more than 40 percent stake.
The commission would soon interview Next Bank general manager Berlin Hsu (許柏林), former vice president of Hua Nan Commercial Bank (華南銀行), to review his qualifications and learn how he plans to address some corporate governance issues at the bank, Chuang said, adding that those issues include staff management and information security.
The bank’s plan to address errors found by the FSC during an inspection last year was submitted by former Next Bank general manager Liu I-cheng (劉奕成), and the commission would confirm with Hsu whether he would be implementing a new plan, Chuang added.
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