30 Individuals, Companies Indicted in Taiwan Army Procurement Scandal

Taichung prosecutors in Taiwan have pressed charges against 33 people, including military personnel and executives of three companies over an alleged procurement scandal involving locally produced eight-wheeled CM-32 Clouded Leopard armored vehicles.

Chiang Yi-fu, chairman of Chung Hsin Electric and Machinery Manufacturing Corp. (CHEM), the main contractor in the project, and representatives of eight other subcontractors is one among the indicted, Asia One reported today.

According to prosecutors, a $209 million deal for the manufacture of CM-32 chassis and power equipment was won by the CHEM in 2012. CHEM and its subcontractors allegedly used Chinese-made spare parts when building the vehicles even though they originally promised to use better-quality parts as stipulated by the contract.

Further, prosecutors also found that none of the subcontractors were qualified or certified to fulfil the contract, resulting in a significant number of problems for the vehicles, with one CM-32 breaking down and requiring major repairs almost every two days, according to prosecutors.

The indictment stated that to avoid being caught in their alleged illicit deals, contractors bribed Wang with NT$850,000 (US$26405.7) and Lee with NT$1.17 million ($36346.69) so the products would pass inspection.

The locally designed and developed Clouded Leopards have been in mass production since 2012. The military later found that the chassis and outer plates of the vehicles were prone to damage and needed frequent repairs. This led the military to suspect that the manufacturers used sub-quality parts during production.

Prosecutors launched large-scale separate raids this June with more than 200 investigators led by 19 prosecutors at 37 locations in Northern, Central and Southern Taiwan, including the Ordinance Readiness Development Centre (ORDC).