The Financial Supervisory Commission: A Protector of Financial Conglomerates, or the People?

The Financial Supervisory Commission: A Protector of Financial Conglomerates, or the People?
China Times editorial (Taipei, Taiwan, ROC)
A Translation
April 7, 2009

Summary: Past or present, east or west, con artists have always had one thing in common. They are willing to use any means available for the sake of personal gain. The American public was shocked to learn that for over ten years former Chairman of the Securities and Exchange Commission Bernard Madoff had been operating a Ponzi scheme. On Taiwan, prosecutors have indicted the head of the Yuanta Group for illegal structural deficits amounting to 700 million NTD. Specifically, prosecutors are seeking a 10 year sentence for violations of securities and exchange regulations and for breach of trust.

Full Text below:

Past or present, east or west, con artists have always had one thing in common. They are willing to use any means available for the sake of personal gain. The American public was shocked to learn that for over ten years former Chairman of the Securities and Exchange Commission Bernard Madoff had been operating a Ponzi scheme. On Taiwan, prosecutors have indicted the head of the Yuanta Group for illegal structural deficits amounting to 700 million NTD. Specifically, prosecutors are seeking a 10 year sentence for violations of securities and exchange regulations and for breach of trust.

According to the Bill of Indictment, the Ma family used their proxies to take illegal advantage of unconventional equity only transactions. It had Yuanta Securities make up the structural deficits. The Ma family should have taken responsibility for the structural deficits. Instead, after resort to massive sleights-of-hand, it raked in huge profits. Yuanta Securities' small shareholders were forced to bear the burden of huge and inexplicable losses. The Ma family insists that the Yuanta structural deficits were entirely legal. Had the Ma family's perfect crime not been uncovered by the Financial Supervisory Commission (FSC) and turned over to prosecutors in late 2008, investors would still be in the dark.

The Ma family has left a deep impression on the public, and not merely for the structural deficit case. The Ma family gave First Son Chen Chi-chung a wedding present of six million dollars cash. Yuanta General Manager Ma Wei-chien is suspected of helping First Lady Wu Shu-chen transport 740 million dollars in cash from Cathay United Bank vaults to Yuanta's office. Yuanta Chief Operating Officer Ma Wei-cheng then transported two billion dollars in cash to the Presidential Mansion. Both Ma brothers have been indicted in the Chen family money-laundering case. The public is wondering why professional bankers were willing to risk laundering money for the Chen family. Why weren't the Ma family's "campaign contributions" made openly and above board, complete with receipts, the way Taiwan Semiconductor's were?

The Yuanta structural deficits case Bill of Indictment includes at least seven Yuanta Securities company officers. The eldest and second-eldest sons of the Koo family have also been implicated. Breach of trust and money-laundering are violations of the most important principle of the financial sector -- trust. That is why they are so difficult for the public to accept. In order to uphold the rights and interests of depositors, the FSC must conduct a thorough investigation of financial conglomerates. It must not dally.

Once the Chen family money-laundering case exploded, the tribute large financial holding companies and conglomerates paid to the Chen family, and the help they provided the Chen family in its money laundering operations, was exposed. The public has no difficulty imagining the quid pro quo involved behind these conglomerates' contributions. Yuanta Securities acquired Fuhwa Financial Holdings. Chinatrust acquired China Development Financial Holdings. China Development Financial Holdings acquired Taiwan International Investment Management. Chinatrust acquired Mega Holdings. Taishing Holdings acquired Changhwa Bank as a result of Ah-Bian's "Second Financial Reform." If prosecutors amass clear evidence of illegal conduct, the restoration of shareholders' rights and shareholders' compensation will become an issue. The FSC must be prepared to deal with the aftermath of the case, and return small shareholders some measure of justice.

Consider the American International Group (AIG) executive bonuses. Obama's handling of the case offers the Ma Ying-jeou administration a point of reference. AIG initially declared that executive bonuses were specified in executive contracts, and entirely legal. But Obama concluded that the public would not tolerate them, and demanded that Treasury Secretary Timothy Geithner recover the bonuses, in full. Over 200 million U.S. dollars in bonuses had already been handed out. To mollify the public, congress expedited legislation levying high taxes on dividends, forcing the recipients to cough up their windfall profits. Only then did he resolve the crisis. Given the AIG fat cats case, FSC officials should have realized that when injustice has provoked public anger, pleas that "We have no legal basis to act" are no excuse. The attitude of FSC officials is critical. From the perspective of Wall Street businessmen, the AIG dividends were fully deserved. But from the perspective of the public, they were utterly unacceptable. Geithner was criticized most vehemently for seeing the world entirely through the eyes of Wall Street.

In fact the FSC has more than sufficient legal cause to prosecute the heads of domestic financial conglomerates. According to Article 54 of the Financial Holding Company Act, any financial conglomerate that violates the law or company procedures, or obstructs the sound operation of the company, may be subject to FSC sanctions. The company must make timely adjustments to its behavior, and may be subject to punishment, depending on the seriousness of the offense. Punishments include removal from managerial positions, and the firing or temporary suspension of board directors or board supervisors. Such administrative sanctions need not await the results of a trial. Otherwise, the Financial Holding Company Act would be superfluous.

From the Yuanta structural deficits case, the FSC gained first-hand information. It is the government agency most familiar with the problem. Evidence clearly shows that the Ma brothers helped the Chen family launder money. The FSC is akin to the US Department of the Treasury. If the FSC, whose head comes from the financial sector, fails to deal with the problem, then it is acting like the major domo of a financial conglomerate, and not like a defender of the rights of the people.

Ever since the financial tsunami struck, con artists the world over have resorted to all means to stick it to the little guy. They want to steal the taxpayer's hard-earned money and use it to issue executive bonuses. The public is thoroughly disgusted with such behavior. Is the FSC committed to covering up financial conglomerate wrongdoing, or defending the rights of the public? If the FSC thinks it can turn a blind eye to their wrongdoing by adopting an attitude of passivity, the public will not merely be disillusioned, it will pay an even higher price in the future. If the FSC fails to impose the strictest possible sanctions upon wrongdoers, then it will become the target of the strictest possible sanctions by the public.

金管會要守著財團還是守著人民
2009-04-07
中國時報

古今中外騙子的共通點，就是無所不用其極地牟取私利。在美國，前證管會主委馬多夫主導超級「龐氏騙局」至少十年以上，震驚各界；在台灣，元大集團負責人因結構債弊案不法套利六．七億元，遭檢方依違反證交法、背信等罪嫌起訴，具體求刑十年。

根據檢方起訴書，元大馬家利用股權轉換與非常規交易，把結構債相關的虧損套給元京證，經過乾坤大挪移，原本應承擔結構債損失的馬家，卻因此獲得大筆不法利益，而讓元京證的小股東莫名其妙地承接巨額損失。針對元大結構債事件，馬家堅稱一切合法；不過，這個超完美的設局，若不是金管會於九十七年底進行金檢時主動發現，並移送檢調單位，投資人迄今都還被蒙在鼓裡。

元大馬家令國人印象深刻的不只結構債事件，先前馬家在陳致中結婚時送出六百萬元大禮；其次，元大金總經理馬維建涉嫌協助吳淑珍，搬運國泰世華銀行保管室裡七．四億元巨款至元大的辦公室；元大金營運長馬維辰則送二億元現金到扁家官邸，兄弟兩人都因扁家洗錢案被列為被告。民眾不禁質疑，為何「專業」的銀行家甘冒風險協助扁家洗錢？馬家的「政治獻金」，為何不學學台積電光明正大捐出，並且領取收據存查？

這次元大結構債遭起訴名單加上先前因洗錢案列為被告者，元大金至少有七人涉案，與先前辜家大少二少的涉案相呼應。無論背信或洗錢，都嚴重違反金融業最重要的誠信原則，也難以讓社會大眾接受。為維護投資人與存款戶權益，我們認為，金管會必須嚴肅檢討金控公司負責人的適格性問題，不能再蹉跎!

自從扁家洗錢案爆發以來，國內許多大型金控與財團爭先恐後前往扁家進貢或協助洗錢的行徑紛紛曝光，看在一般老百姓的眼裡，不難推測財團捐錢的背後，當然另有所圖。不論元大金併復華金、中信辜家入主開發金、開發金併金鼎證、中信金插旗兆豐金、台新金併彰銀等泛二次金改中的案件，未來檢調若查獲有明確不法事證，可能牽涉到股權回復與補償的問題，對此，金管會更必須做好善後處理的準備，還給小股東一個公道。

以美國國際集團（ＡＩＧ）高階主管領取紅利事件為例，歐巴馬的處理態度提供馬政府一個很好的借鏡。ＡＩＧ最初聲稱領取紅利是依契約行事，一切合法。不過歐巴馬認為民意絕非如此，要求財長蓋特納全面追回紅利。由於高達二億多美元的紅利已經發出去，為平息民怨，美國國會火速完成立法課徵高額紅利稅，逼得受領者吐出紅利，才化解這次的危機。從ＡＩＧ的肥貓事件來看，金管會官員應深刻體會:當不公不義的事件激發民眾怒火時，「沒有法源」不能成為藉口；金管人員的心態，才是真正的關鍵。站在華爾街生意人的立場，ＡＩＧ分紅理所當然。但站在人民的立場，卻萬萬不能接受。蓋特納所被人批評最厲者，就在於他習慣從華爾街看世界。

其實，金管會處理國內金控負責人的適格性問題，確實有足夠的法源。依據金融控股公司法第五十四條，金融控股公司有違反法律、章程或有礙健全經營之虞時，主管機關得予以糾正、限期改善，並得視情節輕重處分，包括解除經理人職務、解除董事、監察人職務或停止其於一定期間內執行職務。重點是:這個行政處分不必、也不應等到法律審判，否則金控法即形同蛇足。

以元大的結構債事件來看，金管會掌握第一手資料最了解內情。其次，馬家兄弟協助扁家洗錢的事證亦非常明確。在這樣的情況下，金管會再不處理，該機關就如同美國的財政部，首長來自金融界，像是大財團的管家，而不是人民的保母。

金融大海嘯發生以來，各國金融賊貓用盡各種手段坑殺小老百姓，還要拿納稅人的血汗錢來發紅利，民眾對於這樣無恥行徑厭惡到了極點。對於國內部分金控財團的胡作非為，金管會究竟是守著財團，還是守著人民？金管會如果認為閉起眼睛就看不見了，採取消極態度因應，那不僅令人民失望，未來可能要付出更大的代價。職司金融監理的金管會若無法對為非作歹者予以嚴厲的制裁，最後也必須接受民意嚴厲的檢驗。