Indictment Brought In Ching Fu Scandal
Four executives at the Ching Fu Shipbuilding Co., including chairman Chen Ching-nan, were indicted by the Kaohsiung District Prosecutor’s Office on February 12 on charges of fraud, breach of trust, and banking law violations. Prosecutors recommended a 30-year prison sentence for the chairman, commutable to a NT$1 billion (US$34 million) fine, with recommended sentences ranging from 20 to 25 years for the other defendants, who include Chen’s wife and son. Ching Fu is accused of defrauding the government and a series of banks with regard to a contract to build minesweepers for Taiwan’s navy. The company is accused of forging documents to make it appear as if it were meeting project targets, as well as misrepresenting its capital and financial ability to build the ships. The five defendants are accused of submitting fraudulent loan applications to a number of banks, including state-owned First Bank, and for causing NT$13.1 billion in losses to those banks. None of the staffers at First Bank, which was in charge of arranging a syndicated loan for the troubled shipbuilder, was indicted. The fraud was originally revealed by a whistle-blower last August.
Major Earthquake Devastates Hualien
A 6.4 magnitude earthquake struck Hualien on Taiwan’s east coast just before midnight on February 6, causing widespread destruction and 17 deaths, with another 285 injured. Fourteen of the deaths occurred in the Yun Men Tsui Ti building, which partly collapsed and was left leaning precariously, with five members of a single family of tourists from China among the victims. The temblor was preceded and followed by a series of quakes, some measuring as high as 5.7 in magnitude, and the risk of safety for rescue workers delayed the removal of bodies, with the last two victims only recovered on February 25. The frequency of earthquakes in recent weeks has given rise to speculation of “earthquake swarms,” and a local seismologist gained attention for predicting that Hualien would be hit by a magnitude 8.0 earthquake by 2025.
Taipower Seeks Nuclear Restart
State-owned Taiwan Power Co. (Taipower) announced February 6 that it had requested permission to restart its Kuosheng-2 nuclear power unit, one of three reactors that have been shut for an extended period, to help mitigate tight power-supply margins as well as reduce air pollution generated by coal-fired power plants.
Kuosheng-2 has been offline since a short circuit sparked a fire on May 16, 2016. After repairs, Taiwan’s nuclear power regulator, the Atomic Energy Council (AEC), approved the resumption of power generation shortly after the incident, but the Legislative Yuan has blocked the restart. Taipower has continued to maintain the reactor and completed its annual maintenance in December. The AEC will now conduct a review, including both a document review and a physical inspection of the plant, which will likely be completed by March 5, when the proposal for restart will be presented to the legislature’s economics committee for final approval. The request has the support of the executive branch of the government, according to nuclear industry sources.
Taiwan’s plan to create a “nuclear-free homeland” calls for all of its nuclear power plants to be shut permanently by 2025, with the lost power generation replaced by 20 GW of solar power and 4,000 MW of wind power. However, with Taiwan now generating less than 10% of its power through nuclear power and with pressure to reduce coal-fired power generation for environmental reasons, Taiwan has faced razor-thin reserve margins in its power supply in recent summers. Industry insiders are therefore optimistic that the legislature will approve the restart.