Tue, Feb 13, 2018 - Page 1 News List

Five indicted over Ching Fu scandal

KAOHSIUNG PROSECUTION:A 30-year sentence is being sought for chairman Chen Ching-nan, while his wife and son could face 25 and 20 years respectively

By Jonathan Chin  /  Staff writer, with CNA

Chen Wei-chih, left, and his father, Ching Fu Shipbuilding Co president Chen Ching-nan, second right, are escorted in Taipei by officials from the Ministry of Justice’s Investigation Bureau in an undated photograph.

Photo: CNA

The Kaohsiung District Prosecutors’ Office yesterday charged four Ching Fu Shipbuilding Co (慶富造船) executives and one consultant, including chairman Chen Ching-nan (陳慶男), with fraud, breach of trust and banking laws violations.

The prosecutors recommended a sentence of 30 years imprisonment, commutable to a NT$1 billion (US$34 million) fine, for Chen.

Unnamed parties in August last year formally accused Ching Fu of forging proof-of-material procurement documents to give the impression that the company was meeting the project milestones of its minesweeper contract with the Republic of China Navy.

Those complaints triggered an investigation by Kaohsiung prosecutors that led to the indictments.

Deputy Chief Prosecutor Ko Kuang-hui (葛光輝) said the five executives, after obtaining the bid for the minesweepers, discovered the company lacked the capital for the performance and advanced payment bonds specified in the contract.

The shipbuilder’s capital shortage was worsened by excessive investments, Ko said.

The five conspired to submit fraudulent loan applications to multiple banks using counterfeit contracts and invoices, Ko said.

The actions of the accused resulted in financial losses for the banks estimated at as much as NT$13.1 billion, Ko said.

The court should impose heavy sentences, as the actions of the five and their failure to provide information on missing funds from the loans harmed the integrity of the nation’s financial apparatus and national security, Ko said.

The other four defendants are Chen Ching-nan’s wife, Chen Lu Chao-hsia (陳盧昭霞), who served as company director; his son Chen Wei-chih (陳偉志), who served as deputy chairman; former chief executive officer Chien Liang-chien (簡良鑑); and former consultant Lee Wei-feng (李維峰).

Prosecutors have asked for sentences of 25 years for Chen Wei-chih and 20 years for Chien Liang-chien, commutable to fines of NT$600 million and NT$300 million respectively.

The prosecutors issued no indictment for alleged wrongdoing by the Ministry of National Defense, Kaohsiung City Marine Bureau and the banks involved in the syndicated loans, saying they could not discover any lawbreaking by these parties.

Asked about the indictment, Chen Ching-nan only said that his attorneys would talk to the media from now on.

State-owned First Commercial Bank (第一銀行) said that none of its staff were indicted showed it had operated within the law when it oversaw the syndicated loan to the shipbuilder, adding that civil litigation against Ching Fu and its guarantors would continue.

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