Lieutenant General Chen Chi (陳麒), the top finance officer at the Ministry of National Defense (MND), is under investigation for having close links and an allegedly improper relationship with an arms supplier that is being investigated in a major military bribery scandal.
Chen heads up the ministry’s Comptroller Bureau and is in charge of budget accounting, financial management and reporting, fiscal year budgeting and the management of special funds.
Chen and his wife have for years registered their employee labor insurance via the Ming Chang Machinery Industrial Co (敏昌機械工業公司), which is owned by military arms and parts merchant Huang Ling-ling (黃玲齡), the Chinese-language China Times newspaper reported.
Along with such employee-to-owner links, Chen and his wife are close friends with Huang and went together to Thailand for a vacation in 2012, the newspaper reported.
Ming Chang Machinery and New Taipei City-based Yi Chih Co (益志公司) were implicated in a major bribery scandal involving the ministry earlier this year as the suppliers for steel-plated treads for armored vehicles manufactured at an army production center, with total contracts worth NT$1.5 billion (US$47.96 million) over the past five years.
The China Times report said that many in the military knew of Chen’s close links to Ming Chang Machinery, and as the ministry’s chief comptroller, he did not try to avoid the apparent conflict of interest, fueling “gossip” in the ministry.
A ministry official was quoted as saying that no military officer would register themselves for employee labor insurance at an weapons supplier, as it would suggest an improper business relationship.
Chen said he had no part in the alleged bribery, adding that he and his wife would fully cooperate with the investigation.
The ministry continues awarding “tailor-made” business contracts to Ming Chang Machinery and Yi Chih this year, even though investigators uncovered evidence of bribery last year, reports said.
The Chinese-language Apple Daily reported that a number of retired military officials are impliacted in the case, saying that they collaborate with active-duty ministry staff to create “nonexistent demand” for parts, while designing project tender specifications that only these two companies can fulfill.
The report said that despite being investigated, Ming Chang Machinery secured five ministry contracts worth NT$27.57 million this year, while Yi Chih obtained various project contracts this year for a total worth of NT$638 million.
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