Cathay SITE Chief Resigns Over Supervision Lapse Amid NT$948 Million Compensation

(CNA Taipei, July 7) Cathay Securities Investment Trust Co., Ltd. (Cathay SITE) is facing a compensation of NT$948 million due to violations of related-party investment regulations. Cathay Financial Holdings announced today on behalf of Cathay SITE that its President, Chang Yung-chuan, has voluntarily resigned from his position, citing inadequate supervision. The resignation is effective July 8, and Senior Vice President Cheng Li-cheng will temporarily assume his duties.

The incident at Cathay SITE originated when Kuo Ming-chien, former chairman of Cathay United Bank, served as an independent director for GUC Industrial Co., Ltd. (世芯-KY) starting May 29 of last year, while also being a director at Cathay SITE. Due to internal oversight lapses, Cathay SITE's funds and discretionary accounts invested in GUC Industrial Co., Ltd. stock, thus crossing the related-party red line. Kuo Ming-chien recently resigned as a director of Cathay SITE and subsequently from his positions at Cathay Financial Holdings, Cathay United Bank, and Cathay Private Equity. On July 1, Cathay Financial Holdings President Lee Chang-geng led the management teams of its subsidiaries in a public apology.

Cathay Financial Holdings announced late today on behalf of its subsidiary Cathay SITE that Chang Yung-chuan's resignation as President is effective July 8. Senior Vice President Cheng Li-cheng will act as interim president until the board of directors makes a decision. Cathay Financial Holdings also conveyed Chang Yung-chuan's statement that he is voluntarily resigning due to inadequate supervision and offered his deepest apologies to all parties.

Cathay SITE previously explained that after recalculating eight funds, the total compensation to investors amounts to approximately NT$494 million for about 50,500 beneficiaries. Combined with the previous compensation of NT$454 million for discretionary accounts, the total compensation reaches NT$948 million. (Editor: Lin Shu-yuan) 1150707

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