Cabinet, Economics Ministry censured over China Steel bidding

Taipei, Feb. 6 (CNA) The Control Yuan censured the Cabinet and the Ministry of Economic Affairs Wednesday for failing to oversee tenders held by the government-invested China Steel Corp.
The government's top watchdog body said the failures led to irregularities related to a bribery case involving a former top Cabinet official. China Steel lacks a standard mechanism governing purchases and tenders and can therefore decide who to sign contracts with at will, said Control Yuan member Yeh Yao-peng.
Moreover, its purchases and tenders are not overseen by the Legislature, Yeh went on, adding that this oversight led to the bribery scandal involving former Cabinet Secretary-General Lin Yi-shih.
While the Cabinet and the ministry have a say in the management appointments and operations of China Steel, they have failed to properly oversee the company's tendering process and prevent political interference, according to the Control Yuan. Lin was indicted October last year of helping Kaohsiung-based Dih Yeon Industrial Co. to secure a slag treatment contract from a subsidiary of China Steel Corp. in 2010 in his capacity as a ruling Kuomintang lawmaker, in return for NT$63 million (US$2.1 million). Lin, who reportedly demanded a further NT$83 million from the Kaohsiung contractor in 2012 after he began serving in the Cabinet, also faces charges of demanding bribes, concealing illegal gains and keeping unaccountable assets. China Steel shifted from holding open tenders for slag treatment in 2005 at the suggestion of its contractors to signing five-year contracts with three suppliers, including Dih Yeon. China Steel renewed the contracts with the same three suppliers in 2010, according to the Control Yuan. This change in China Steel's tendering process made it easier for corruption and other irregularities to take place, Yeh said.
The censure was aimed at prodding the Cabinet to push China Steel to establish a comprehensive system governing its tenders to prevent further irregularities, Yeh said. (By Sophia Yeh and Scully Hsiao)