September 6, 2017 / 10:14 AM / a year ago

UPDATE 1-Taiwan's financial regulator eyes governance at family-run firms

* Promises stricter enforcement of regulations

* New chief regulator is not from financial-services industry (Adds comments, details)

By Faith Hung

TAIPEI, Sept 6 (Reuters) - Taiwan’s new top financial regulator on Wednesday identified corporate governance at family-owned firms as a problem that he intends to work on as one of the first orders of business.

Wellington Koo, an attorney with connections to the ruling Democratic Progressive Party, has been appointed as the chief of the Financial Supervisory Commission (FSC), which regulates Taiwan’s banking, insurance and securities industries.

“The financial sector is healthy in terms of operations,” Koo said at an introductory press briefing, where he raised the issue of family ownership. “I’ll strive to address that issue,” he said, adding the FSC will more strictly enforce rules for non-compliant financial holdings firms.

Taiwan President Tsai Ing-wen named a new premier on Tuesday in a reshuffle in response to sagging approval ratings, and Koo will serve as FSC chief in the new cabinet.

More than half of Taiwan’s 15 financial holding firms are family-run, including the sector’s biggest players, raising concerns about their ability to put their fiduciary duties to shareholders ahead of the controlling family’s interests. Koo pledged to address the issue, but gave no details.

He previously served as chief of a committee appointed by the Tsai administration and tasked with recovering politically “ill-gotten gains,” assets that the DPP claims the opposition Kuomintang (KMT) party siphoned from the public. The KMT has denied any wrongdoing.

Some have questioned Koo’s qualifications for the FSC post, as he has not worked in the financial services industry. But others said an outsider’s perspective is what the FSC needs.

“He’s not of the silo mentality, he’s more independent,” said an executive of a privately-run financial firm. (Reporting by Faith Hung; Editing by Richard Borsuk)

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