TAIPEI (Taiwan News) — The developer of Taipei's newest skyscraper has become embroiled in an embezzlement scheme that allegedly enabled a Chinese firm to become covertly involved in the project, Mirror Media reported on Tuesday (Jan. 30).
"The Sky Taipei," Taipei's latest landmark, led by Grand River Development Limited with an investment of more than NT$20 billion (US$642 million), was expected to be completed by the end of this year. The building is set to become the second tallest building in Xinyi District after Taipei 101.
Mirror Media revealed allegations that the directors of the development firm embezzled over NT$1 billion from a round of loans purported to fund the construction and are facing breach of trust charges based on evidence gathered by prosecutors.
It is also suspected that Grand River Development's Vice Chair Chiu Kuan-hsun (邱冠勳) misappropriated capital raised to repay the personal debt of another director, Ma Ting-hai (馬廷海).
On Jan. 18, the Taipei District Prosecutor's Office conducted searches in four locations including Grand River Development, the residences of Chiu and former CFO Chung Chao-feng (鐘肇峰), and a company named Shenjing (盛景公司) established by Chiu. In addition, a lawsuit has been filed by the overseas subsidiary of MediaTek, the major shareholder.
Chinese firm secretly given stake
The ownership rights of The Sky Taipei were allegedly pledged to a Chinese securities firm, allowing it to exercise creditor rights and attend all Grand River Development meetings. This is tantamount to Chinese capital interfering with Grand River Development's management rights, evading scrutiny from the Department of Investment Review, and raising suspicions throughout the process.
The Prosecutor's Office suspected that more than NT$1 billion in The Sky Taipei construction funds had been illegally misappropriated and that someone had sold shares overseas for NT$45 billion. To prevent The Sky Taipei from becoming an unfinished project, the investigation team seized the transaction contracts, computers, and mobile phones of the suspects.
Chiu is now subject to travel restrictions, and prosecutors have not ruled out a second wave of summonses.
A source familiar with the matter told Mirror Media that Chiu is suspected of misappropriating funds from increased capital raised, and his involvement is linked to Ma, another Grand River Development director. Ma, known as a "real estate tycoon," hails from the family of Hong Kong's Oriental Daily News and serves as the president of Peych Croup Co.
Ma is accused of working with Chiu to secretly divert capital to repay personal loans. Due to the connection between the embezzled funds and overseas holding companies established by Grand River Development, a commercial court recently issued a restraining order, prohibiting changes to Grand River Development shareholders to safeguard investor interests.
According to the magazine, Grand River Development obtained assets for the project through a large-scale consortium loan led by Mega International Commercial Bank and Yuanta Commercial Bank Co., involving a total of 10 financial institutions in Taiwan. Chiu and Ma are accused of setting up overseas holding companies such as "August Gold," "Green Heaven," and "Luxe Opus" at the upper echelons of Grand River Development under the pretext of tax savings.
In addition, they formed "Lion Best Company," ostensibly also for tax savings. However, behind the scenes, they allegedly used The Sky Taipei's assets as collateral for loans, engaging in questionable financial maneuvers.