萬國法律事務所

Suspected of selling TRF (Target Redemptions Forward) improperly, four banks have been brought up for prosecutorial investigation by the Financial Supervisory Commission (FSC). Mr. Gui-Mao Wu, Head of the FSC's Financial Examination Bureau, revealed for the first time during a questioning procedure at the Legislative Yuan that four banks are suspected of assisting their clients prepare financial statements when selling said clients TRF, and this case has already been transferred for prosecutorial investigation. Rui-Cang Li, FDC Chief, stated that due to need for secrecy in connection with the investigation, the prosecutors are still investigating and the names of these banks cannot appropriately be disclosed at this time.

According to the relevant laws, only professional juridical persons are permitted to invest in TRF. However, most small and medium enterprises (SMEs) are companies with few persons, or are even oneman companies, and these types of SMEs do not have boards of directors. However, bank bylaws stipulate that when selling TRF, the bank must show the financial statement and a record of the board approval for such investment. Thus, some banks appear to be offering “one-stop-shop” services, which include opening accounts, preparing false financial statements and records of the boards of directors for their clients.

The FSC explained that although providing a table for responsible persons of such SMEs to sign may not constitute counterfeiting, however, the FSC will clamp down on banks offering such one-stop-shop services and bring them up for prosecution, and if found guilty, such banks will face severe penalties.