“The Financial Reconstruction Fund Management Commission will authorize the Central Deposit Insurance Corp. (CDIC) to handle the assessment and tender invitation matters,” Tsai said at a news conference in which she announced Premier Su Tseng-chang’s assent to the resignation of Financial Supervisory Commission (FSC) Chairman Shih Jun-ji over the recent financial fiasco.

The state-run CDIC took over The Chinese Bank, an affiliate of the financially troubled Rebar Asia Pacific Group, after a run on the bank broke out Jan. 5 following two other Rebar subsidiaries’ applications for insolvency reorganization a day earlier. The bank run eased only after the CDIC and the Financial Reconstruction Fund stepped in with full cash support.

Tsai said the government hopes The Chinese Bank liquidation or sell-off can be finalized in six months.

As the Rebar group reportedly controls more than 120 companies spanning manufacturing, communications, media, banking, financial and other services, Tsai said, the Executive Yuan will keep close tabs on its affiliates’ operations.

“The government will help structurally or financially healthy Rebar affiliates maintain normal operations for the benefits of their employees, clients and up- and downstream suppliers,” Tsai said.

Moreover, Tsai went on, the FSC will be required to cooperate closely with judicial authorities in investigating whether there were any irregularities in Rebar dealings with Eastern Multimedia Group, which is headed by a son of the Rebar Group founder Wang You theng, as well as whether Rebar’s three major financial service offshoots — the Great Chinese Bills finance Co., Union Insurance Co. and the Chinese Bank — have been involved in any illegal dealings in the past decade.

“We are determined to get to the bottom of the matter and bring to justice all those accountable for the group’s recent financial fiasco,” Tsai said. At his own request, Tseng has been transferred to an advisory post, Tsai said, adding that FSC Vice Chairwoman Susan Chang will concurrently take over the vacant position.

Noting that the Rebar financial storm involves very complicated elements and has been brewing for a long time, Tsai said the Executive Yuan will form a special task force to probe who should be held responsible for the group’s many suspected irregularities before determining disciplinary measures.

The authorities are investigating Rebar’s suspected financial crimes, including insider trading, phony accounting practices, embezzlement of corporate funds and violations of accounting regulations and banking law.

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