Thu, Nov 23, 2017 - Page 3 News List

Court impounds Ching Fu HQ

DUBIOUS DEADLINE:The Coast Guard Administration said it would cancel a contract with the shipbuilder should it fail to deliver a search-and-rescue vessel by the due date

Staff writer, with CNA

The headquarters of Kaohsiung-based Ching Fu Group is impounded by the Kaohsiung District Court yesterday.

Photo: Taipei Times

The Kaohsiung District Court yesterday impounded the headquarters of Ching Fu Group (慶富集團) at the request of one of the firm’s lenders amid allegations of a subsidiary’s financial mismanagement and involvement in a fraud scandal related to a navy contract.

The court took provisional legal ownership of the first six floors of the 10-story building on Fuxing Fourth Road and the firm’s partial land ownership of the site, the court said.

The action was taken to protect the rights of those to whom the firm owes money, the court said, adding that despite the impound order, the company’s employees could still freely go to work.

Ching Fu Group spokesman Chi Ching-lung (紀景朧) said the firm remains operational and employees showed up for work yesterday.

Asked about the court’s action, Chi declined to comment, saying that he has limited knowledge of the case.

Taipei-based First Commercial Bank last month filed a civil lawsuit with the court, demanding provisional attachment of Ching Fu Shipbuilding Co (慶富造船) assets after the subsidiary allegedly defrauded nine domestic lenders led by First Commercial Bank into providing a NT$20.5 billion (US$682.9 million) syndicated loan using bogus documents.

The shipbuilder said the loan was for capital needed to build six minesweepers for the navy as part of a NT$34.9 billion contract it secured from the Ministry of National Defense in October 2014.

The Kaohsiung District Prosecutors’ Office, which has been investigating the fraud allegations since August, suspects the shipbuilder used bogus documents to falsify capital increases required under the terms of the loan.

Separately yesterday, the Coast Guard Administration (CGA) said that it would terminate a contract with Ching Fu Shipbuilding and demand about NT$1.5 billion in compensation if the company is unable to meet a deadline for delivery of the next of 28 search-and-rescue boats it won the contract to build on May 30, 2013.

CGA Minister Lee Chung-wei (李仲威) said the contract would be terminated if the shipbuilder is unable to deliver the 14th vessel by Sunday.

Ching Fu Shipbuilding has completed and delivered 13 boats, and eight more are being built.

The original deadline for delivery of the 14th vessel was Nov. 10, but the shipbuilder asked for a 16-day extension, Lee said.

Lee, who expressed doubt that the deadline would be met, said that “once the time is up, we will proceed according to the terms of the contract and terminate.”

The coast guard would ask for NT$1.527 billion in compensation should it terminate the contract, Lee said, adding that it would take three to four more years to complete the project should it need to find a new contractor.

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