Mega Financial Fallout: Taiwan Financial Regulator Quits

Taiwan’s top financial regulator resigned in an effort to contain the fallout from the controversy over anti-money laundering failings at Taipei-based Mega Financial Holding Co.

In a statement posted Monday on the Financial Supervisory Commission’s website, Chairman Ding Kung-wha said he was stepping down “to maintain his innocence” and to contain any damage to the regulatory body over its handling of the Mega issue.

The New York Department of Financial Services imposed a $180 million fine on Mega in August, describing its compliance program as a “hollow shell.” It said that suspicious transactions flowed between Mega’s New York and Panama branches and that a substantial number of customer entities were apparently formed by Mossack Fonseca, the law firm at the center of the Panama Papers scandal.

Ding took over in May as President Tsai Ing-wen’s top financial regulator, saying he would lean toward a light-touch approach and pledging to direct more funds in the financial system toward smaller businesses, start-ups and investments in infrastructure. In September, the commission announced a plan to raise NT$410 million ($13.1 million) from financial institutions as part of the Tsai administration’s policy of fostering innovation.

The FSC will be led on an interim basis by current Vice Chairman Huang Tien-mu until a new chairman is found, cabinet spokesman Hsu Kuo-yung said in an official webcast Monday.