Creditors of Formosa Tools Co yesterday asked the Ministry of Justice to investigate allegations of bankruptcy fraud and illegal transfer of assets involving the Changhua County company.
The firm reportedly defaulted on bank loans totaling NT$587 million (US$20.52 million) and owes NT$388 million to 194 supplier companies, who have formed a group for Formosa Tools’ creditors and filed a complaint with the Changhua branch of the Ministry of Justice’s Investigation Bureau.
The group said that there were financial irregularities in Formosa Tools’ bankruptcy filings.
One creditor surnamed Lin (林) said that Formosa Tools vice president Hsu Wei-chun (許維鈞) had moved most of the company’s production materials to its Vietnamese plant before filing for bankruptcy.
Hsu had allegedly told one supplier that his company’s main production would be based in Vietnam, Lin said.
His company had a business relationship with Hsu for more than 20 years until Hsu encountered financial difficulties last year, Lin added.
Lin said that Formosa Tools had defaulted on NT$587.4 million in bank loans — NT$250.9 million from Taiwan Cooperative Bank, NT$133 million from Bank SinoPac, NT$56.7 million from Cathay United Bank, NT$90 million from Shanghai Commercial and Savings Bank, NT$36 million from Sunny Bank and NT$20.8 million from Fina Finance and Trading.
Hsu and his brother, Hsu Ting-chin (許廷鑫), have obtained US citizenship, making it difficult for creditors to recover their money, Lin said.
Hsu Wei-chun refuted the allegations.
“It is not true that I have fled Taiwan to avoid repaying debts. I am still in Taiwan and running the company, and making every effort to settle this financial situation,” Hsu Wei-chun told reporters yesterday.
Formosa Tools mainly exports gardening tools and household implements, but the COVID-19 pandemic last year led to increases in the costs of maritime shipping, he said, adding that he had problems booking cargo ships, especially in the second half of last year.
“My company could not ship our products, which led to our cash flow problems late last year, and now I am negotiating with banks to restructure loan repayment plans, and also working to settle debts with supplier companies,” he said.
Hsu Wei-chun and his brother have headed Democratic Progressive Party-affiliated branch offices for overseas Taiwanese in the US, and have been supporters of the party for many years, local media reported.
Changhua residents familiar with the brothers said that they campaign for the party, but had never run for office.
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