TAIPEI (Taiwan News) – On Monday, Feb. 12, the chairman of the Ching Fu shipbuilding company (慶富造船), along with two associates and two family members were charged with loan fraud for falsifying documents. Prosecutors are seeking a 30 year sentence.
Chen Ching-nan (陳慶男), his wife, his son, and two company executives have been charged with fraud by the Kaohsiung District Prosecutor’s office for their role in the Ching Fu minesweeper ship-building scandal that hit headlines in late 2017.
In August 2017, an anonymous whistle-blower alerted the navy that the company was falsifying its progress reports for a US$1.19 billion dollar project, contracted from the Ministry of National Defense, to construct six minesweeper ships.
After a raid on the company’s offices, it was found that Ching Fu had established several overseas shell companies, and had received nearly US$202 million in loans from multiple Taiwanese banks, reports AFP.
Prosecutors are seeking a 30 year sentence for the CEO, Chen Ching-nan, and lesser sentences for his four accomplices, according to Maritime-Executive.
The AFP report suggests that the case has dealt a huge blow to confidence in Taiwan’s domestic defense industry, and some have questioned a lack of rigor in the Navy’s screening and procurement process in selecting contractors for domestic construction projects.