TAIPEI • The head of Taiwan's top financial regulator resigned yesterday after the US authorities fined a local bank linked to the so-called Panama Papers scandal.

Mr Ding Kung-wha, chairman of the Financial Supervisory Commission (FSC), had been criticised over his handling of the controversy involving Mega International Commercial Bank, which was hit with a US$180 million (S$245 million) fine in the United States in August.

The bank was accused of showing "flagrant disregard" for anti-money laundering laws, and US regulators say they had identified "suspicious transactions" between the bank's New York and Panama branches.

The Panama Papers, which were released by the media in April, comprise a trove of leaked documents that reveal a murky financial underworld of tax evasion by politicians, celebrities and sports stars using shell companies.

Mega Bank had dealings with a Panamanian law firm at the centre of the scandal, the US Department of Financial Services said.

The US order does not specify whether the Taiwan bank actually engaged in money laundering.

Some lawmakers criticised Mr Ding for being slow in handling Mega and another case in which a local entertainment company was accused of insider trading and market manipulation. The firm is now under investigation.

"I resigned to maintain my innocence and hope it will end the harm for the FSC," Mr Ding said in a statement, adding that the commission had launched a probe into the Mega case at the earliest possible time.

Mr Ding was appointed by Premier Lin Chuan in May and is the first Cabinet minister to leave office under the new government.

The FSC hit Mega Bank with a NT$10 million (S$430,600) fine last month and demanded the bank fire six people, including its legal representative and former chairman McKinney Tsai.

Taiwan's Cabinet has since passed a Bill to toughen its anti-money laundering laws.

AGENCE FRANCE-PRESSE