State-run banks could lose up to NT$20.1 billion (US$665.97 million) for extending a loan to troubled Ching Fu Shipbuilding Co (慶富造船), the Cabinet said yesterday, adding that First Commercial Bank chairman Tsai Ching-nain (蔡慶年), who supervised the syndicated loan, would be removed.
However, there is no conclusive evidence of any political intervention in the loan decision, the Cabinet said.
Ching Fu, which was awarded a NT$35.8 billion contract to build six minesweepers for the navy as part of a domestic warship program, defaulted on a NT$20.5 billion syndicated loan, forcing nine banks to lose a combined NT$20.1 billion, an Executive Yuan report said yesterday.
Photo: CNA
The investigation revealed major dereliction of duty by the Ministry of National Defense and First Bank in awarding the contract and loan to the financially unstable company, Vice Premier Shih Jun-ji (施俊吉) said.
There were also suspicious money transfers to Ching Fu, and questionable communications between the Presidential Office and the Cabinet over the case, Shih added.
The ministry failed to ensure that Ching Fu had the financial capability to carry out the project; failed to ensure the company had the manufacturing ability; and failed to launch a negotiation process with China Fu and a potentially more qualified bidder, CSBC Corp (台船), before resorting to lots-drawing to decide the winner of the minesweeper tender, the report said.
Photo: Lu Kuan-cheng, Taipei Times
The ministry lowered the minimum asset requirement for potential bidders from NT$3.52 billion to NT$176.46 million, Minister without Portfolio Lo Ping-cheng (羅秉成) said.
It also neglected that Ching Fu had little ability to construct a shipyard for the minesweepers and awarded the project anyway, Lo said.
“Throughout the whole procurement process, the ministry gave the impression that it was biased toward Ching Fu and relaxed the rules,” Lo said.
According to the report, First Bank was also negligent in failing to ensure that Ching Fu had the financial and manufacturing ability before approving the loan.
While it required Ching Fu to complete a capital increase as part of its loan terms, the bank failed to demand an execution plan in advance, resulting in the bank’s approving an additional loan of NT$1.05 billion to help Ching Fu increase its capital.
“The bank opened its vault for Ching Fu to take the money away,” Shih said.
Tsai is to be removed due to negligence and the ministry has to report its planned disciplinary measures to the Executive Yuan, Shih said.
Meanwhile, Ching Fu transferred NT$4.93 billion of the loan money into five questionable accounts in Hong Kong, Macau and Singapore, which the company said were used to pay ship manufacturing costs, Shih said.
About NT$1.3 billion was transferred back from the overseas accounts to those of Ching Fu’s managers and subsidiaries in Taiwan, Shih said, adding that prosecutors are to investigate suspected money laundering or other illegal activities.
The Presidential Office on Sept. 1, 2015, under then-president Ma Ying-jeou (馬英九), issued a document to the Executive Yuan which included a letter by Ching Fu petitioning the government to assist the company in securing loans, the report said.
Former Executive Yuan secretary-general Chien Tai-lang (簡太郎) then convened two meetings with the banks to discuss the loan case in September and December that year, but Tsai said he was not under pressure to have First Bank lead the loan, Shih said.
“Although the investigation reveals [the actions of the Presidential Office and the Executive Yuan], it does not mean that we have determined there was interference by senior officials,” Shih said.
The Cabinet began the investigation on Oct. 17 and is to transfer the case to the judiciary for further investigation.
Meanwhile, President Tsai Ing-wen (蔡英文) yesterday said in the Solomon Islands that whether the government should transfer the minesweeper project to another shipbuilder or abort the project to upgrade the existing fleet depends on the navy’s evaluation.
“It has to be a professional decision rather than a political one,” she said.
Additional reporting by Chung Li-hua
TPP RALLY: The clashes occurred near the Chiang Kai-shek Memorial Hall on Saturday at a rally to mark the anniversary of a raid on former TPP chairman Ko Wen-je People who clashed with police at a Taiwan People’s Party (TPP) rally in Taipei on Saturday would be referred to prosecutors for investigation, said the Ministry of the Interior, which oversees the National Police Agency. Taipei police had collected evidence of obstruction of public officials and coercion by “disorderly” demonstrators, as well as contraventions of the Assembly and Parade Act (集會遊行法), the ministry said in a statement on Sunday. It added that amid the “severe pushing and jostling” by some demonstrators, eight police officers were injured, including one who was sent to hospital after losing consciousness, allegedly due to heat stroke. The Taipei
NO LIVERPOOL TRIP: Taiwan’s Lin Yu-ting, who won a gold medal in the boxing at the Paris Olympics, was embroiled in controversy about her gender at that event Taiwanese boxer Lin Yu-ting (林郁婷) will not attend this year’s World Boxing Championships in Liverpool, England, due to a lack of response regarding her sex tests from the organizer, World Boxing. The national boxing association on Monday said that it had submitted all required tests to World Boxing, but had not received a response as of Monday, the departure day for the championships. It said the decision for Lin to skip the championships was made to protect its athletes, ensuring they would not travel to the UK without a guarantee of participation. Lin, who won a gold medal in the women’s 57kg boxing
‘NOT ALONE’: A Taiwan Strait war would disrupt global trade routes, and could spark a worldwide crisis, so a powerful US presence is needed as a deterrence, a US senator said US Senator Deb Fischer on Thursday urged her colleagues in the US Congress to deepen Washington’s cooperation with Taiwan and other Indo-Pacific partners to contain the global security threat from China. Fischer and other lawmakers recently returned from an official trip to the Indo-Pacific region, where they toured US military bases in Hawaii and Guam, and visited leaders, including President William Lai (賴清德). The trip underscored the reality that the world is undergoing turmoil, and maintaining a free and open Indo-Pacific region is crucial to the security interests of the US and its partners, she said. Her visit to Taiwan demonstrated ways the
The US has revoked Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) authorization to freely ship essential gear to its main Chinese chipmaking base, potentially curtailing its production capabilities at that older-generation facility. American officials recently informed TSMC of their decision to end the Taiwanese chipmaker’s so-called validated end user (VEU) status for its Nanjing site. The action mirrors steps the US took to revoke VEU designations for China facilities owned by Samsung Electronics Co and SK Hynix Inc. The waivers are set to expire in about four months. “TSMC has received notification from the US Government that our VEU authorization for TSMC Nanjing
RSS