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Former Mega chairman listed as defendant

Former Mega Chairman McKinney Tsai.

Former Mega chairman questioned

Former Mega Chairman McKinney Tsai.

TAIPEI (Taiwan News) – Former Mega Financial Holding Chairman McKinney Tsai was questioned by prosecutors as a defendant Tuesday in the case of money-laundering allegations against the bank’s New York branch.
On August 19, New York State’s Department of Financial Service (DFS) fined Mega International Commercial Bank US$180 million (NT$5.7 billion) for a number of allegedly suspicious transactions between its branches in New York and Panama.
The Taipei District Prosecutors Office, which has been put in charge of the investigation in Taiwan, summoned Tsai as a witness for interrogation Tuesday afternoon, but he was later also listed as a defendant and was banned from traveling abroad.
While he was not detained and no bail was set, prosecutors still announced he could not move house, venture out to sea or leave the country, reports said.
Later Tuesday, Tsai’s successor as chairman of Mega Holdings, Hsu Kuang-shi, was also questioned, but he reportedly argued the whole incident took place just as he was taking up his new position.
According to an interview published by the Chinese-language United Daily News, Tsai described the whole New York incident as purely a case of poor judgment and dismissed allegations that politics and foreign relations might have played a part in alleged money laundering by the bank.
The former top official said the bank had presented improvements to the U.S. authorities which had been initially accepted, but in the end a fine still came.
Tsai denied he had retired early because of the incident, saying family reasons were the only motive.
During the day, he released a statement blaming the fine on New York branch managers not understanding U.S. anti-money laundering regulations, while the fine was issued for reporting failures by the bank, not for actual money laundering. Tsai also said that when he retired last March, he was under the impression that the case had been resolved.
Earlier Tuesday, the banker also withdrew from the board of Cathay Financial Holding Co., Ltd. for personal reasons, reports said.
During the morning, prosecutors and agents of the Ministry of Justice Investigation Bureau visited Mega Financial Holding headquarters, the Ministry of Finance and the Financial Supervisory Commission to look at documents potentially related to the case.