Prosecutors yesterday said they had detained seven suspects and released nine others on bail in an ongoing investigation into military corruption at the 209th Arsenal over the production of CM-32 Clouded Leopard (雲豹) armored vehicles.
The Taichung District Prosecutors’ Office confirmed that Chiang Yi-fu (江義福), chairman of Chung Hsin Electric and Machinery Manufacturing Corp (CHEM, 中興電工), the main contractor in the case, was released yesterday after posting bail of NT$5 million (US$160,123).
Earlier, prosecutors confirmed an investigation of four military personnel, including a colonel and a staff sergeant, at the Ministry of National Defense Armaments Bureau’s 209th Arsenal, which produces tanks and armored vehicles at the Ordinance Readiness Development Center in Nantou County.
The judicial probe centered on accusations of graft, collusion with contractors and kickbacks to officials in charge of production of Ireland’s Timoney Technology-designed CM-32 — officially known as the Taiwan Infantry Fighting Vehicle — which is assembled at the 209th Arsenal.
Prosecutors said the investigation would likely involve charges of fraud and corruption, as well as breaches of the Government Procurement Act (政府採購法), the Business Entity Accounting Act (商業會計法) and the Securities Exchange Act (證券交易法).
CHEM, a listed company, and its subcontractors allegedly used inferior parts and components produced in China at lesser cost for the military tender contract for CM-32 chassis and power equipment.
This resulted in a significant number of problems for the vehicles, with one CM-32 breaking down and requiring major repairs every two days, according to officials.
The senior executives and accounts for CHEM’s subcontractors — Yi Rong Technology Co (億嶸科技), Wei Shuan Co (崴軒) and Chi Fu Industry Co (啟福工業) — were detained after raids at 37 locations on Thursday, with a total of 57 individuals held for questioning.
CHEM won the NT$7.6 billion procurement contract with a bid of NT$4.8 billion.
However, the firm did not manufacture the required parts and equipment, instead handing the production to the three subcontractors.
Prosecutors found that none of the three subcontractors were qualified or certified to fulfill the contract.
Former People First Party legislator Liu Wen-hsiung (劉文雄) said the case was an example of the nation’s armed forces losing their will and capability to fight, as well as being mired in corruption, while under the eight-year leadership of President Ma Ying-jeou (馬英九).
Liu also questioned what he said was the Ma administration’s and the military’s misguided policy of producing tanks and armored vehicles in large quantities, as the nation’s population density and geography would limit the mobility of ground forces in the case of a conflict, adding that the focus of modern warfare has shifted to high-tech anti-air and anti-ship defense systems, with accurate laser and GPS-guided missiles.
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