The Financial Supervisory Commission (FSC) yesterday fined SinoPac Financial Holdings Co (永豐金控) NT$10 million (US$308,356) and cut its chairperson’s salary over poor internal controls and failure to comply with corporate governance requirements.
The company’s management team was found to have invited major shareholder and former chairman Ho Shou-chuan (何壽川) to attend two meetings about its medium and long-term strategic planning in August and September 2021, Banking Bureau Deputy Director-General Phil Tong (童政彰) said.
During the meetings, Ho was briefed by executives of the company and its subsidiaries about their business plans, Tong said, citing a routine commission inspection of SinoPac Financial.
Photo: Kelson Wang, Taipei Times
No reports or meeting documents were kept, he added.
Ho stepped down as chairman at SinoPac Financial in June 2017 after the company was found to have engaged in a series of loans via its banking and leasing units without adequate collateral and documentation.
Being a founder of SinoPac Financial, Ho still owns a substantial stake in the company, but he should receive information from his representatives on the board, rather than directly from management, as he is no longer in charge of the company, the commission said.
“The company has three major deficiencies: poor corporate governance, a lack of internal controls and failure to properly manage subsidiaries,” Tong said.
The commission also cut SinoPac Financial chairwoman Chen Shi-kuan’s (陳思寬) salary by 30 percent for six months for her failure to supervise the company, and imposed the same salary cut on Liao Shun-hsin (廖順興), head of the company’s legal department, for three months for contravening corporate governance requirements, it said.
The commission since last year has fined Shin Kong Financial Holding Co (新光金控), China Development Financial Holding Corp (中華開發金控) and CTBC Financial Holding Co (中信金控) NT$20 million to NT$40 million after their major shareholders were found to have improperly intervened in company operations.
To help stop major shareholders from improperly interfering in the operations of financial holding companies and banks, the commission this month submitted proposed amendments to the Financial Holding Company Act (金融控股公司法) and the Banking Act (銀行法) to the Executive Yuan for review, hoping the draft legislation would be deliberated in the legislature as soon as possible.
However, the commission has watered down penalties in its proposal, saying it hopes the legislation would advance smoothly and achieve its policy goals in stages.
Some have asked whether there is external pressure ahead of January’s presidential and legislative elections, but FSC Chairman Thomas Huang (黃天牧) denied there was any such factor at play at a meeting of the Legislative Yuan’s Finance Committee yesterday.
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