* Mega’s ex-chairman Tsai, former chief secretary Wang detained
* Duo could be detained for up to two months (Adds background)
TAIPEI, Oct 5 (Reuters) - Taiwan prosecutors said on Wednesday they have detained the ex-chairman of Mega Financial Holding and a key former executive of the company, following a government probe into the state-run group’s violation of U.S. banking regulations.
Prosecutors have taken former Mega chairman McKinney Tsai and former chief secretary Wang Chi-pang into custody as suspects of serious crimes, in part because they could pose “a risk of flight and destroying evidence” related to violations at the New York branch of Mega’s banking arm, said Chang Chieh-chin, deputy chief prosecutor of the Taipei District Prosecutors Office.
Chang had said on Tuesday Tsai and Wang were suspected of being involved in breaching of anti-money laundering rules.
The duo could be detained for up to two months, Chang said. Tsai stepped down as chairman in March.
New York authorities in August slapped Mega Financial’s unit Mega International Commercial Bank with a $180 million fine for violations that included lax attention to risk exposure in Panama.
It was the first time in a decade that a Taiwan-based financial institution was penalized by U.S. authorities. Taiwan’s President Tsai Ing-wen said the case damaged the island’s reputation and created public mistrust about supervision of the financial sector.
Current finance minister Sheu Yu-jer and ex-finance minister Chang Sheng-ford will also be investigated by Taiwan’s Control Yuan, an investigative agency that monitors government, the cabinet said in a statement late on Monday.
The government ordered the Control Yuan probe this week to find out whether the finance minister and other officials were responsible for inadequate oversight.
Taiwan is also currently investigating whether Mega Financial broke local criminal laws. (Reporting by Faith Hung and Jeanny Kao; Editing by Sam Holmes and Muralikumar Anantharaman)