Taipei, March 18 (CNA) Financial technology provider AnyTech (認和科技) will be fined NT$2.17 million (US$65,770) for violating rules governing Chinese investment in Taiwan, according to the Ministry of Economic Affairs (MOEA) on Tuesday.
The Taiwanese subsidiary of the company was found by an MOEA investigation to be partly funded by the Chinese state, despite the company being based in Singapore.
Explaining the ministry’s decision to penalize the company, Economics Minister Kuo Jyh-huei (郭智輝) told lawmakers at the Legislative Yuan on Tuesday that some of AnyTech’s financial backing came from Beijing-based Rivere Tech (江融信科技).
Rivere Tech is a Chinese enterprise that is 25 percent owned by China SME Development Fund Co., a national-level equity fund in which the Ministry of Finance of the People’s Republic of China is a major shareholder, Kuo said.
Under Article 73 of the Act Governing Relations between the People of the Taiwan Area and the Mainland Area, Chinese companies “may not engage in any investment activity” in Taiwan unless permitted by the relevant authorities.
Kuo pointed to Article 93 of the same act, which empowers Taiwanese authorities to levy an administrative fine of up to NT$25 million on entities that violate the aforementioned article.
Concerns over AnyTech’s Chinese financial backing were heightened due to its involvement with Cathay United Bank, one of Taiwan’s largest commercial banks.
AnyTech had established a subsidiary in Taiwan based on its Singaporean credentials and took on a project to upgrade the bank’s core credit card system in Taiwan.
However, Peng Jin-lung (彭金隆), chairman of the
(FSC), told lawmakers on Tuesday that Cathay United Bank told the FSC that the bank’s new credit card system had not yet gone live.
The bank also told the FSC that it had performed a security review of the system and found “no backdoor vulnerabilities,” Peng said.
In a statement issued on Tuesday, Cathay United Bank said it notified AnyTech on Feb. 24 that it would terminate its contract early.
An internal cybersecurity review, completed on March 14, showed “no suspicious backdoors, malicious network connections, encryption, or obfuscation, and no risk of information leakage,” the Taiwanese bank said.
Cybersecurity is a growing concern in Taiwan, especially in relation to China, whose ruling communist party has repeatedly stated its intention to annex the island.
Last Thursday, President Lai Ching-te (賴清德) said after a national security meeting that Taiwan “must adopt proactive, effective measures to prevent China from engaging in cognitive warfare against Taiwan or endangering cybersecurity.”
