EDITOR’S NOTE: The headline in the Feb. 5 print edition of this article incorrectly described Wang You-theng’s relationship to Omni Bank. He is the majority owner.
A San Gabriel Valley bank has found itself the focus of unwanted attention after an international manhunt was launched for one of its Taiwanese owners following the collapse of several of his family’s Asian holdings.
Protesters picketed outside of Omni Bank in Alhambra demanding owner Wang You-theng turn himself into authorities. Other news reports indicated the bank was under close watch by U.S. regulators for potential large withdrawls and any suspect transactions.
For more than a month Taiwan authorities have been attempting to arrest Wang, founder of the Rebar Group, and his wife, Chin Shih-ying. They fled Taiwan in late December as news broke of the failure of several companies, including the Chinese Bank in Taipei. Prosecutors in Taipei issued warrants on Jan, 15 for the pair on charges of embezzlement, insider trading and fraud.
Wang and Chin left the Los Angeles area on Jan. 31 to fly to Southeast Asia, according to Asian news reports. As of Feb. 1, they reportedly were either under detention or surveillance in Singapore as Taiwan officials attempted to negotiate their extradition.
[UPDATE: As of Feb. 5, Wang You-theng was in the custody of U.S. immigration officials after attempting to enter the country without a valid visa, according to Taiwan news reports. He is expected to go before an immigration judge next week. Wang was returned to the U.S. after being denied entry in Singapore. His wife Chin Shyh-ying, who returned with him, was not detained because she is a U.S, citizen and holds a valid U.S. passport.]
Wang acquired Omni bank in 1990, and his wife had served as vice chairwoman until she resigned last month. Chin’s brother and two sons still serve as bank directors. The family controls 96 percent of the stock.
Omni Bank President Cary Ching declined to provide details about the family’s oversight of the bank, but in earlier interviews emphasized that Omni was regulated under the U.S. banking laws that are stricter than those in Taiwan.
After about a dozen protesters picketed the bank on Jan. 26, Ching told the San Gabriel Valley Tribune on Jan. 26 that speculation that the bank could be used to launder embezzled money is false. The bank’s five locations are mostly in the San Gabriel Valley, which has a large Asian immigrant population.
Deposits down
Omni, which had deposits of $151 million and total assets of $183 million as of Sept. 30, is considered a small- to mid-size bank by both Los Angeles and Chinese American bank standards. In comparison, Pasadena-based East West Bank, with assets of $10.8 billion, is the county’s second largest bank.
Bank deposits in the third quarter were down 12 percent from a year earlier, and 12 percent from the previous quarter, but a banking industry consultant said that did not necessarily mean Omni was in trouble. “If people keep calm, if there’s no panic, the bank’s fine,” he said, asking his name not be used because he does business in the Asian community.
Though the number of deposit accounts of more $100,000 at Omni has fallen over the past year, such large accounts still made up 54 percent of total deposits as of Sept. 30, according to data submitted to the Federal Deposit Insurance Corp., which insures deposits of less than $100,000.
The U.S. government could eventually force the Wangs as the bank’s main shareholders to divest. Kevin Mukri, spokesman for the U.S. Comptroller of the Currency’s office, which regulates nationally chartered banks, would not comment on specific cases, but said after 9/11 the U.S. government instituted several mechanisms for monitoring unusual financial transfers, especially at institutions controlled by foreign nationals.
“We regulate by risk,” said Mukri. “If a bank’s practices are becoming riskier, they’re going to get more and more of our attention.”
The 80-year-old Wang is a mainland Chinese native who came to Taiwan in the 1950s. He founded Rebar in the 1960s as a manufacturer of the construction industry reinforcement bar from which the company takes its name. Though a longtime member of an opposition party, he was considered influential and respected enough to be appointed national policy advisor to President Chen Shui-bian in 2000 when the Taiwan’s Democratic Progressive Party came to power.
Rebar has wide holdings in textiles, construction, hospitality, real estate, retail services, insurance, media and banking. Two of Rebar’s largest subsidiaries China Rebar and Chia Hsin Food filed for insolvency protection on Dec. 29, with debts of $890 million mainly owed to the group’s Chinese Bank. After depositors staged a run on the bank, the government was forced to take over its management.
At least 12 Wang family members and associates so far have been arrested in connection with the the scandal, including Wang’s brother and three sons.
Taiwanese expatriates and the Chinese American banking community in Southern California have been following the story, though few wanted to speak on the record about the case. Local banking industry sources say the bank’s largest customers likely are asking a lot of questions of bank managers.
“We feel very sorry for the bank’s customers and employees,” said an official at another Chinese-American bank who asked her name not be used. “In banking, trust is very important so we understand that customers have concerns.”
Omni’s Ching touched on that subject in an article he wrote for a recent Comptroller of Currency special report on minority-owned banks. He noted that more than half of Omni Bank’s loans are made to Asian customers and 80 to 90 percent of its deposits are from the Asian community which traditionally favors gold, cash, and bank deposits over riskier equity investments such as stocks. His bank’s typical depositor has a five-figure account.
“In Asia, many banks are large and mostly government-owned or controlled,” Ching wrote in the article. “With corruption not uncommon, the concept of trustworthy private bank ownership is new to, and embraced by, most immigrants. Asians trust United States banks.”
