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
‘CORRECT IDENTIFICATION’: Beginning in May, Taiwanese married to Japanese can register their home country as Taiwan in their spouse’s family record, ‘Nikkei Asia’ said The government yesterday thanked Japan for revising rules that would allow Taiwanese nationals married to Japanese citizens to list their home country as “Taiwan” in the official family record database. At present, Taiwanese have to select “China.” Minister of Foreign Affairs Lin Chia-lung (林佳龍) said the new rule, set to be implemented in May, would now “correctly” identify Taiwanese in Japan and help protect their rights, the Ministry of Foreign Affairs said in a statement. The statement was released after Nikkei Asia reported the new policy earlier yesterday. The name and nationality of a non-Japanese person marrying a Japanese national is added to the
AT RISK: The council reiterated that people should seriously consider the necessity of visiting China, after Beijing passed 22 guidelines to punish ‘die-hard’ separatists The Mainland Affairs Council (MAC) has since Jan. 1 last year received 65 petitions regarding Taiwanese who were interrogated or detained in China, MAC Minister Chiu Chui-cheng (邱垂正) said yesterday. Fifty-two either went missing or had their personal freedoms restricted, with some put in criminal detention, while 13 were interrogated and temporarily detained, he said in a radio interview. On June 21 last year, China announced 22 guidelines to punish “die-hard Taiwanese independence separatists,” allowing Chinese courts to try people in absentia. The guidelines are uncivilized and inhumane, allowing Beijing to seize assets and issue the death penalty, with no regard for potential
‘UNITED FRONT’ FRONTS: Barring contact with Huaqiao and Jinan universities is needed to stop China targeting Taiwanese students, the education minister said Taiwan has blacklisted two Chinese universities from conducting academic exchange programs in the nation after reports that the institutes are arms of Beijing’s United Front Work Department, Minister of Education Cheng Ying-yao (鄭英耀) said in an exclusive interview with the Chinese-language Liberty Times (the Taipei Times’ sister paper) published yesterday. China’s Huaqiao University in Xiamen and Quanzhou, as well as Jinan University in Guangzhou, which have 600 and 1,500 Taiwanese on their rolls respectively, are under direct control of the Chinese government’s political warfare branch, Cheng said, citing reports by national security officials. A comprehensive ban on Taiwanese institutions collaborating or
STILL COMMITTED: The US opposes any forced change to the ‘status quo’ in the Strait, but also does not seek conflict, US Secretary of State Marco Rubio said US President Donald Trump’s administration released US$5.3 billion in previously frozen foreign aid, including US$870 million in security exemptions for programs in Taiwan, a list of exemptions reviewed by Reuters showed. Trump ordered a 90-day pause on foreign aid shortly after taking office on Jan. 20, halting funding for everything from programs that fight starvation and deadly diseases to providing shelters for millions of displaced people across the globe. US Secretary of State Marco Rubio, who has said that all foreign assistance must align with Trump’s “America First” priorities, issued waivers late last month on military aid to Israel and Egypt, the
RSS