The Taipei District Prosecutors Office has indicted Taiwan Yunbao Technology, a company illegally established in Taiwan by China's eBaoTech, along with four of its managers — bad news for the information systems supply chain serving Taiwan's insurance industry.

• Prosecutors found that Shanghai eBaoTech invested in Taiwan without authorisation and used Taiwan Yunbao as a shell to conduct business activities, in violation of the Act Governing Relations between the People of the Taiwan Area and the Mainland Area.
• Sun Wei-tsung and Wu Yin-hua, the company's successive general managers, were indicted along with project managers Li Chin-fen and Wang Shih-hsiung.
• As early as 2016, the Ministry of Economic Affairs had ordered eBaoTech to halt or withdraw its investment, but the company circumvented this by setting up a new entity with the same personnel and organisational structure.
• Chinese executives directed operations in Taiwan remotely via WeChat groups and online meetings, with technical support provided by engineers in China.
• Business was then routed through a Singapore subsidiary, which engaged Taiwanese distributors to sign contracts with multiple insurance companies, packaging the deals as local transactions.

Outlook: Once the case reaches trial, Taiwanese insurers with dealings involving Chinese-funded information systems may face information-security and compliance reviews by regulators.