Prosecutors indict five in Ching Fu loan fraud case

2018/02/12 21:25:38 fontsize-small fontsize-default fontsize-big
Chen Wei-chih (陳偉志, left) and Chen Ching-nan (陳慶男, second right)/CNA file photo

Chen Wei-chih (陳偉志, left) and Chen Ching-nan (陳慶男, second right)/CNA file photo

Taipei, Feb. 12 (CNA) Kaohsiung prosecutors on Monday indicted the chairman and vice chairman of Ching Fu Shipbuilding Co. (CFS) and three other people in a loan fraud case involving the financially troubled company.

The Kaohsiung District Prosecutors' Office indicted CFS Chairman Chen Ching-nan (陳慶男, 77) and vice chairman Chen Wei-chih (陳偉志, 46) on charges of fraud, breach of trust and violating the Banking Act for allegedly using fake documents to obtain a NT$20.5 billion (US$711.35 million) syndicated loan from nine domestic lenders in 2016.

Prosecutors are recommending a 30-year sentence and NT$1 billion (US$34.7 million) fine for Chen Ching-nan and a 25-year sentence and NT$600 million fine for his son Chen Wei-chih.

Others indicted Monday on similar charges were former CFS CEO Chien Liang-chien (簡良鑑, 47), for whom prosecutors are seeking a 20-year sentence and NT$300 million fine, the chairman's wife Chen Lu Chao-hsia (陳盧昭霞, 74), and former CFS project manager Lee Wei-feng (李維峰, 49).

The company, the country's largest private shipbuilder, applied for the loan to finance the building of six minesweepers for Taiwan's Navy after it won a contract from the Ministry of National Defense in October 2014 to build the ships at a cost of NT$34.93 billion.

The prosecutors' office, which has been investigating the case since August 2017, suspects CFS used fake documents to falsify four capital increases that were required under the terms of the loan.

When summoned for questioning in October 2017, the Ching Fu chairman and his son admitted they forged the documents for the loan applications under Chien's direction, according to prosecutors, because CFS needed to make up for cash flow shortages caused by insufficient funding by the MND to support the project.

The chairman and vice chairman were released at that time after posting bail of NT$8 million and NT$5 million, respectively.

Prosecutors later filed a request to the local district court to detain Chien. But the request was denied, and Chien was subsequently released on NT$3 million bail in November 2017.

After the loan fraud scandal emerged, the government cracked down on the company and canceled the contract in December 2017 because it was found to be in breach of contract and failed to post the necessary advance payment guarantee by the stipulated deadline.

(By Chen Ja-fo and Evelyn Kao)
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