Taipei-Ching Fu Shipbuilding Co. (CFS), a financially troubled local shipbuilder embroiled in an alleged loan fraud scandal, had twice this year asked the Ministry of Foreign Affairs (MOFA) for help to secure a loan but the requests were rejected, a source close to the matter said Thursday.
In its requests to the foreign ministry, CFS said the loan was for a shipbuilding project it had undertaken in Tuvalu, one of Taiwan's allies in the South Pacific, the source told some members of the media on condition of anonymity due to the sensitivity of the issue.
The company had built a ship for Tuvalu in 2009 at a cost of US$15.5 million and was working on a second vessel that it started in 2012 and was scheduled to complete in 2015, according to the source.
However, CFS still has not finished the second ship, and on June 3 and 16 sent letters to the foreign ministry asking for help to secure a loan in Taiwan to complete the project, the source said.
The foreign ministry turned down the two requests, saying that the business contract was between CFS and the Tuvalu government and that it would be inappropriate for the Taiwan government to intervene, the source said.
The ministry said it would become involved only if the dispute between the two parties put the Taiwan-Tuvalu diplomatic relations at risk, according to the source.
Asked to comment on the issue, MOFA spokesman Andrew Lee (???) said the foreign ministry did not use taxpayers' money to help with CFS' two shipbuilding projects in Tuvalu.
It was purely a commercial dispute between the Tuvalu government and CFS, Lee said, adding that the foreign ministry was never involved.
He said the Tuvalu government has not asked MOFA or Taiwan's embassy in that country to assist in the matter. MOFA, however, has asked the Taiwan embassy in Tuvalu to closely monitor the developments in the case, Lee said.
CFS, Taiwan's largest private shipbuilder, has been embroiled in a fraud scandal over a contract that it won from the Ministry of National Defense in October 2014 to build six mine countermeasure vessels 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.
Prosecutors, who launched an investigation into the case in August, suspect that CFS used bogus documents to falsify four capital increases that were required under the terms of the loan.
The Presidential Office has denied an accusation that it used its influence to help CFS obtain the NT$20.5 billion syndicated loan.
Source: Focus Taiwan News Channel