Court impounds shipbuilder’s headquarters amid fraud probe

Kaohsiung-Kaohsiung District court impounded the headquarters of Ching Fu Shipbuilding Co. (CFS) on Wednesday, at the request of one of Ching Fu's lenders, amid allegations of the company's financial woes and its involvement in a fraud scandal related to a Navy contract.

The court took provisional legal ownership of the first six floors of the 10-story building on Fuxing Fourth Road and CFS' partial land ownership of the site, the Kaohsiung District Court said.

The court explained the action was taken to protect the rights of debtees and emphasized that despite the impound order, CFS employees could still freely come and go to work.

CFS Group spokesman Chi Ching-lung (???) said the company is still operational and employees showed up for work that day.

Asked about the court's action, Chi declined to comment, saying he has limited knowledge of the case.

Taipei-based First Commercial Bank filed a civil lawsuit at the district court last month, demanding provisional attachment of CSF assets, after the company allegedly defrauded a group of nine domestic lenders led by the bank into providing it with a NT$20.5 billion (US$684 million) syndicated loan using bogus documents.

The loan, according to CFS, Taiwan's largest private shipbuilder, was for the purpose of making up the required funds needed to build six minesweepers for the Navy, as part of a NT$34.9 billion contract it secured from the Ministry of National Defense in October 2014.

Kaohsiung District Prosecutors' Office, which has been investigating the fraud allegations since August, suspects CFS used bogus documents to falsify capital increases that were required under the terms of the loan.

Source: Focus Taiwan News Channel