TAIPEI (CNA) – The Taiwan High Court Kaohsiung Branch denied Monday an application by local prosecutors to detain former Ching Fu Shipbuilding Co. (CFS) chairman Chien Liang-chien (簡良鑑) over alleged illegal activities involving the company.
CFS, Taiwan’s largest private shipbuilder, is embroiled in a fraud scandal over a contract that it won from the Ministry of National Defense in October 2014 to build six mine sweepers for Taiwan’s military at a cost of NT$34.9 billion (US$1.18 billion), as part of the nation’s domestic warship-building program.
The fraud allegedly occurred when CFS was trying to obtain a NT$20.5 billion syndicated loan from a group of nine domestic lenders led by First Commercial Bank.
Kaohsiung District Prosecutors’ Office, which has been investigating the case since August, suspects CFS used bogus documents to falsify four capital increases that were required under the terms of the loan.
On Nov. 10, Chien was brought in for questioning by prosecutors, who then filed a request to the local district court to detain him. But the request was denied, and Chien was consequently released on a NT$3 million bail on the same day. A week later on Nov. 17, Kaohsiung prosecutors made their second attempt to keep Chien in custody.
However on Monday, the request to detain Chien was rejected by the high court’s Kaohsiung Branch, on the grounds that the former chairman is not as deeply involved in the company’s alleged loan fraud case as current chairman Chen Ching-nan (陳慶男) or his son and vice chairman Chen Wei-chih (陳偉志), both of whom have been released on bail after paying bail of NT$8 million and NT$5 million, respectively, in August.
Meanwhile, the Republic of China Navy denied Monday that it had been pressured by the government to pay NT$2.4 billion to CFS.
Navy Commander Huang Shu-kuang (黃曙光) clarified that the shipbuilding project was carried out according to the law and he was aware of all payment details related to CFS.
Earlier last week, Navy Command Headquarters said it paid Ching Fu according to the terms of the contract and did not receive any instructions from the Presidential Office or a supervisory unit with regard to the payment.
“The role of the presidency is to carry out major governmental policies; it is not responsible for counting coins and payments. As Navy Commander, I bear full legal responsibility,” Huang said.
By Chen Ja-fo, Lu His, Lu Hsin-hui and Ko Lin