Sat, Feb 02, 2019 - Page 1 News List

Retired admirals impeached over scandal

By Jason Pan  /  Staff reporter

The front entrance of the Control Yuan on the intersection of Zhongxiao E Road and Zhongshan S Road in Taipei is pictured on June 10 last year.

Photo: Chung Lee-hua, Taipei Times

The Control Yuan yesterday impeached two former top naval commanders, retired admirals Chen Yeong-kang (陳永康) and Pu Tze-chun (蒲澤春), and two government officials for their roles in the procurement of minesweepers from Ching Fu Shipbuilding Co (慶富造船).

A one-year investigation into the tender contract process for six minesweepers worth NT$35.2 billion (US$1.14 billion at the current exchange rate) found major breaches of the law and of government procurement regulations that resulted in undue financial benefit for the contract, Control Yuan members said.

The impeachments of Chen, former commander of the navy; Pu, former deputy commander of the navy; former Kaohsiung Marine Bureau director Wang Jui-jen (王端仁); and Fisheries Agency senior researcher Chen Wen-shen (陳文深) were each approved by a majority vote of Control Yuan members.

Pundits said that the impeachments could derail some ongoing defense projects that are part of the government’s push for the development of indigenous warships, as Chen serves on the executive board of the Chungshan Institute of Science and Technology, while Pu is the military strategy adviser to the president.

The Control Yuan has forwarded the cases to the Judicial Yuan’s Public Functionary Disciplinary Sanction Commission, which is to decide on punishment.

The minesweeper project, which Ching Fu won over a rival bid by CSBC Corp Taiwan (台船), ultimately failed following a spate of financial irregularities and fraudulent bank loan applications.

The Control Yuan said that the two former admirals’ lowering of a capital requirement to one-200th of the project’s total value constituted a contravention of the Government Procurement Act (政府採購法), which stipulates a requirement for no less than one-20th of the total value.

During the tender process, they also failed to properly assess Ching Fu’s staff, technical capacity, experience, past work, finances and other considerations when evaluating its ability to build the minesweepers within the contracted 12-year period, it said.

“Ching Fu had insufficient capital for the project, but it used questionable means and fraudulent loans to present a sound financial standing, which was not endorsed by a certified accounting firm. This led to the ultimate failure of the project, for which the two admirals must bear main responsibility,” the Control Yuan said.

Chen, who is visiting the UK, said by telephone that his impeachment would be worthwhile “if this decision can help our armed forces take more active roles, the navy is relieved of the Ching Fu project, and the defense procurement mechanism and regulations are improved so that they are handled by competent professions.”

Prosecutors in February last year indicted four Ching Fu executives, including chairman Chen Ching-nan (陳慶男), as well as one consultant, on charges of fraud, breach of trust and banking law breaches linked to the scandal.

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