TAIPEI, Taiwan - Taichung prosecutors yesterday pressed charges against 33 civilians and military personnel over an alleged procurement scandal involving locally produced eight-wheeled CM-32 Clouded Leopard armored vehicles.
Among those indicted yesterday were 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.
Master Sergeant Wang Chien-hsin of the 209th Factory under the military's Ordnance Readiness Development Center (ORDC), and two civilian employees of the military's Armaments Bureau, namely Lee Ti-kuang and Lin Hsing-jung, were also among those indicted, prosecutors said.
They are facing charges of fraud and corruption, as well as breaches of the Securities Exchange Act and forgery of documents, said the indictment.
According to prosecutors, a NT$4.8-billion (S$209 million) deal for the manufacture of CM-32 chassis and power equipment was won by the CHEM in 2012.
However, 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.
Prosecutors also found that none of the subcontractors were qualified or certified to fulfil the contract.
This resulted 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 said that to avoid being caught in their alleged illicit deals, contractors bribed Wang with NT$850,000 and Lee with NT$1.17 million so the products would pass inspection.
Lin, meanwhile, was indicted over forged documents.
The locally designed and developed Clouded Leopards have been in mass production since 2012.
However, 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 subsequently 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 ORDC in Jiji Township, Nantou County.