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
DETERRENCE: With 1,000 indigenous Hsiung Feng II and III missiles and 400 Harpoon missiles, the nation would boast the highest anti-ship missile density in the world With Taiwan wrapping up mass production of Hsiung Feng II and III missiles by December and an influx of Harpoon missiles from the US, Taiwan would have the highest density of anti-ship missiles in the world, a source said yesterday. Taiwan is to wrap up mass production of the indigenous anti-ship missiles by the end of year, as the Chungshan Institute of Science and Technology has been meeting production targets ahead of schedule, a defense official with knowledge of the matter said. Combined with the 400 Harpoon anti-ship missiles Taiwan expects to receive from the US by 2028, the nation would have
POSSIBILITIES EMERGE: With Taiwan’s victory and Japan’s narrow win over Australia, Taiwan now have a chance to advance if South Korea also beat the Aussies Taiwan has high hopes that the national baseball team would advance to the World Baseball Classic (WBC) quarter-finals after clinching a crucial 5-4 victory over South Korea in a nail-biting extra-inning game at the Tokyo Dome yesterday. Boosted by three home runs — two solo shots by Yu Chang (張育成) and Cheng Tsung-che (鄭宗哲) and a two-run homer by Stuart Fairchild — the triumph gave Taiwan a much-needed second victory in the five-team Pool C, where only the top two finishers would advance to the knockout stage in Miami, Florida. Entering extra innings with the game tied at four apiece, Taiwan scored
MISSION OF PEACE: The foreign minister urged Beijing to respect Taiwan’s existence as an independent nation, and work together to ensure peace and stability in the region Minister of Foreign Affairs Lin Chia-lung (林佳龍) yesterday rejected Chinese Minister of Foreign Affairs Wang Yi’s (王毅) comments about Taiwan, criticizing China as a “troublemaker” in the international community and a disruptor of cross-strait peace. Speaking at a news conference on the sidelines of the Chinese National People’s Congress, Wang said that Taiwan has always been a territory of China and that it would be impossible for it to become its own country. The “return” of Taiwan to China was the natural outcome of the Chinese people’s resistance against Japan in World War II, and that any pursuit of independence was “doomed
‘UNWAVERING FRIENDSHIP’: A representative of a Japanese group that co-organized a memorial, said he hopes Japanese never forget Taiwan’s kindness President William Lai (賴清德) yesterday marked the 15th anniversary of the Tohoku earthquake and tsunami, urging continued cooperation between Taiwan and Japan on disaster prevention and humanitarian assistance. Lai wrote on social media that Taiwan and Japan have always helped each other in the aftermath of major disasters. The magnitude 9 earthquake struck northeastern Japan on March 11, 2011, triggering a massive tsunami that claimed more than 19,000 lives, according to data from Japanese authorities. Following the disaster, Taiwan donated more than US$240 million in aid, making it one of the largest contributors of financial assistance to Japan. In addition to cash donations and
RSS