Kaohsiung-The chairman of Ching Fu Shipbuilding Co. (CFS) was sentenced to 25 years in prison by the Kaohsiung District Court on Friday for several offenses in a high-profile loan fraud case related to a Navy contract.
After a trial that lasted more than a year, the court found Chen Ching-nan (???) guilty of forgery and violating the Banking Act and, in addition to his prison sentence, ordered him to pay a fine of NT$105 million (US$3.38 million).
Also found guilty was Chen's wife, Chen Lu Chao-hsia (????), who was sentenced to 18 months in jail for not putting up the funds she had committed to in a capital increase plan that was necessary to secure the loan.
Former CFS CEO Chien Liang-chien (???) was sentenced to six months in jail for forging documents, but the sentence is commutable to a fine, and CFS project manager Lee Wei-feng (???) was acquitted of charges against him, according to the court ruling.
The court also ordered the company to pay a fine of NT$280 million for the loan fraud.
Another key figure in the case, CFS Vice Chairman Chen Wei-chih (???), who is the son of Chen Ching-nan, fled overseas last year after jumping bail and his trial has been postponed until he can be arrested, the court said.
The sentences and fines were lighter than those recommended by prosecutors, who indicted the five individuals in February 2018 on charges related to using fake documents to obtain a NT$20.5 billion syndicated loan from nine domestic lenders in 2016.
At that time the prosecutors were seeking a 30-year sentence and NT$1 billion fine for Chen Ching-nan; a 25-year sentence and NT$600 million fine for his son Chen Wei-chih; and a 20-year sentence and NT$300 million fine for Chien, arguing that their offenses severely damaged the country's national interests.
The company, the country's largest private shipbuilder, applied for the loan to finance the building of six minesweepers for Taiwan's Navy after it won a contract from the Ministry of National Defense in October 2014 to build the ships at a cost of about NT$35 billion.
The Kaohsiung District Prosecutors' Office, which had investigated the case since August 2017, suspected that CFS used fake documents to falsify four capital increases that were required under the terms of the loan.
When summoned for questioning in October 2017, the Ching Fu chairman and his son admitted they forged the documents for the loan applications under Chien's direction, according to prosecutors.
They said they did it because the company needed to make up for cash flow shortages caused by insufficient funding from the MND to support the project.
The chairman and vice chairman were released at that time after posting bail of NT$8 million and NT$5 million, respectively.
The verdicts can be appealed.
Source: Focus Taiwan News Channel