Cathay Financial Overhauls Governance After Executive Moonlighting Controversy

The controversy began when Ming-Chien Kuo, a former chairman of Cathay United Bank, became an independent director of Alchip Technologies on May 29, 2025, while serving as a director of Cathay Securities Investment Trust. Information about the group’s related parties was not fully reported, resulting in eight Cathay Securities Investment Trust funds and discretionary accounts buying Alchip shares in breach of investment restrictions. The case exposed gaps in information sharing and internal governance across subsidiaries of a major financial holding company.

On July 1, 2026, Cathay Financial Holdings President Chang-Ken Lee and the management team bowed in apology. Lee said compensation for public fund investors and discretionary-account clients totaled about NT$948 million. He also announced that subsidiary executives would be barred in principle from taking outside positions, with exceptions subject to approval, and that an external consultant would be hired to conduct a comprehensive review of procedures. On July 2, the Financial Supervisory Commission dispatched six inspection teams to Cathay Financial and its banking, life insurance, property insurance, securities and investment trust units to examine reporting and control mechanisms.