■ Whistle-blowing system and whistle-blower
E.SUN FHC, E.SUN Bank and E.SUN Securities has established " Whistleblowing Channels
and Procedures ". The procedure specifies the time frame for receiving and investigating
cases and establishes the dedicated handling unit and independent investigation
units. Whistleblowing hotlines, email addresses, and mailboxes have been set up and
announced on the corporate internal and official websites. These channels are available
to any employee or outsider wishing to report cases. Whistleblowers' identities are kept
confidential. It is also prohibited to impose unfavorable human resource measures on
employees who report cases. Anonymous reporting is also enabled to actively prevent
unethical, corrupt or illegal conduct.
Among the 28 cases filed via the whistleblowing channels in 2020, 1 was confirmed as
breach of ethical corporate management (case 1), and the rest were concerning consumer
disputes or matters irrelevant to the bank business. In addition, 3 cases (cases 2, 3 and
4) were not filed via the whistleblowing channels. The Compliance Department handles
cases immediately after receiving them, and the President appoints an appropriate
unit for investigation. Relevant investigation results are reported to the President and
provided to the head of the accused person's department without revealing the identity
of the whistleblower. The Company has investigated the facts of the 4 reported cases,
disciplined the employees who breached ethical corporate management, and has taken
appropriate measures accordingly. Case types and subsequent handling are as follows:
|Cases reported by internal whistleblowers
|Cases reported by external whistleblowers
Note: A total of 28 cases were reported in 2020, and all
investigations have been completed.
Among them, 1 case was related to code of conduct and ethics.
■ Reporting on breaches
In 2020, there was zero lawsuit or monetary losses against E.SUN FHC and its subsidiaries
for misconducts relating to: fraud, insider trading, anti-trust, anti-competitive behavior,
market manipulation, malpractice, or other related financial industry laws or regulations.
A total of 4 violations against ethical corporate management occurred in E.SUN Bank
in 2020, among which 1 was in violation of anti-corruption laws. Units involved in the
aforementioned ethical corporate management violations have been urged to review
and improve deficiencies and the persons involved have been disciplined. The risk
control measures have been comprehensively reviewed. Education for supervisors and
employees has been enhanced to cultivate the corporate culture of compliance and the
employees' compliance awareness to avoid similar problems in the future.
related to violation of the code of
conduct and ethics
|Reported via whistleblower channels
|Reported via other channels (e.g. audit)
|Number of substantiated cases
|Number of cases under investigation
|Cases related to corruption
consultant used counterfeiting and
illegitimately embezzled customer funds.
||Please see the
following column for details.
conducted short-term opportunist
transactions on futures, stock financing and
stock day-trading during office hours.
Punishment was imposed
according to internal guidelines and policy.
the quota for customer
serviced customers of their original
units after rotation.
Some commission broker placed orders for
stock using the customer's account, and there
was capital exchange between them.
The person has been suspended
from work. Relevant management
measures have been enhanced.
The responsible person did not report an
incident that required arbitration within 5
business days of knowing it or of the incident's
training has been
enhanced. The reporting process
was requested to be implemented
according to relevant regulation
■ Authority penalty cases
(1) E.SUN Bank was fined 12 million NTD by the competent authority due to a former
financial consultant at the Puqian Branch of E.SUN Bank who had opened fake
accounts using customers' names to manipulate payments for personal use.
(2) E.SUN Bank was fined 20 million NTD by the competent authority due to a former
financial consultant at the Fengshan Branch who led or impersonated customers to
conduct remittances and used customers' stamped withdrawal slips or remittance
application forms to embezzle funds in customers' accounts.
Determination on correcting financial consultants' breach of ethical corporate
In 2020, a former financial consultant at the Fengshan branch of E.SUN committed a
violation against ethical corporate management. E.SUN promptly contacted the involved
customers and made an agreement to protect all of the customers' rights. Internally,
relevant units were asked to seriously reflect on the matter. In addition,
PricewaterhouseCoopers was commissioned to conduct a comprehensive weakness diagnosis
and improvement plan to improve on culture, organization, systems and discipline on the
basis of the existing clear risk control mechanisms:
- Reformed organization and clarify the dedicated unit
for the risk management of the main branch. The unit is responsible for
formulating risk management policies and implementing risk monitoring measures.
- Strengthened customer care at the counter and identity
verification for transactions, improve on the transaction review notice for
internet and mobile banking as well
as the bank statement tracing and management system to improve the risk control
mechanism before, during and after a customer transaction.
Established monitoring procedures for high-risk employee behaviors for all of
the branches, improved inspection mechanisms of operational risks of the first
and second lines of defense, and enhanced abnormal behavior status control and
- Improved on the link between employee violations and
internal control problems and reward, discipline, appraisal, promotion and
bonuses; realized prevention and control measures against problems caused by
financial consultants as well as the manager accountability mechanism, and
improved the risk-oriented human resource system.
Improved the whistleblowing mechanism and enhanced the internal independent
audit mechanism, established diverse communication, investigation and tracing to
prevent and avoid repeated problems in real time.
E.SUN comprehensively re-examined the legal compliance and risk management
to breach of ethical corporate management, demanded the employees to be ethical,
consolidated the management accountability and responsibility, and thoroughly
the design of all control points and its effective implementation, so that all
will work together on "zero tolerance on risks and discipline, and zero trust in
operational procedures" to effectively protect customers' rights and to avoid
similar problems in the future.