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* Former execs pose 'risk of flight' - prosecutor
* Govt orders finance minister, others probed on oversight
* Scandal over breach of U.S. anti-money laundering rules (Recasts, adds prosecutor comments)
By Faith Hung
TAIPEI, Oct 4 (Reuters) - Taiwanese prosecutors said on Tuesday they will seek court approval for a warrant to detain the ex-chairman of Mega Financial Holding and a key former executive that they suspect of involvement in breaching anti-money laundering rules at the New York branch of the state-run firm's banking arm.
The latest twist in a scandal that has convulsed Taiwan's financial services sector comes the day after the government ordered a probe to find out whether the island's finance minister and other officials bear responsibility for slack oversight in a case that led to a $180 million fine.
Prosecutors said on Tuesday they suspect former Mega chairman Mckinney Tsai and former chief secretary Wang Chi-pang could be involved in the breach of anti-money laundering rules.
"We will ask court shortly to take them into custody as suspects of serious crimes, who pose a risk of flight and destroying evidence," Chang Chieh-chin, deputy chief prosecutor of the Taipei District Prosecutors Office, told Reuters by telephone.
Tsai and Wang could not be reached for comment.
The scandal claimed its first victim in the island's administration on Monday when Ding Kung-Wha, the chairman of Taiwan's Financial Supervisory Commission (FSC), stepped down amid mounting criticism over the watchdog's effectiveness.
Meanwhile current finance minister Sheu Yu-jer and ex-finance minister Chang Sheng-ford will be investigated by Taiwan's Control Yuan, an investigatory agency that monitors government, the cabinet said in a statement late on Monday. Ex-FSC chief Ding is among the officials the Control Yuan probe.
The agency will determine whether there was "insufficient oversight" in a case that Taiwan's President Tsai Ing-wen has said damaged the island's reputation and created public mistrust about supervision of the financial sector.
As well as Chang, Sheu and Ding, ex-FSC chiefs William Tseng and Chen Yu-chang and ex-vice chairperson Jennifer Wang also face investigation by the Control Yuan. All of those to be probed who served in their respective roles over a period from 2010 to 2016, the cabinet statement said.
Finance minister Sheu, his predecessor Chang and the former FSC officials could not be reached for comment.
President Tsai's opponents on the island said on Monday that ex-FSC chief Ding's departure was a symbolic political gesture that put disproportionate blame on the official, who only assumed his position with the FSC in May of this year.
A veteran of Taiwan's administration not widely known in international finance circles, Ding previously served as chief of the Taipei Exchange and as a finance ministry official. (Reporting by Faith Hung; Editing by Kenneth Maxwell)