Core Pacific chair indicted over irregular land transaction

Taipei, May 8 (CNA) Former Core Pacific Group Chairman Sheen Ching-jing (沈慶京) has been indicted for allegedly arranging for a listed affiliate company to purchase the heavily indebted Core Pacific City shopping mall site in Taipei at an inflated price in 2019.

According to an indictment issued on Friday, the Taipei District Prosecutors Office is seeking a 26-year prison sentence and a fine of NT$600 million (US$19.11 million) for Sheen on charges including violations of the Securities and Exchange Act and the Money Laundering Control Act.

Prosecutors said Core Pacific Group opened the Core Pacific City shopping mall in Taipei in 2001, but the business suffered heavy losses after its second year of operation.

The group had secured a syndicated loan of NT$12 billion during the mall's development, but still faced NT$9.85 billion in unpaid debt, prosecutors said.

In addition, Sheen accumulated substantial gambling debt from overseas casino activities, prosecutors said. As of June 2019, debts owed by Sheen and companies under the Core Pacific Group totaled NT$18.18 billion.

To ease the financial pressure, the group attempted to auction off the land occupied by the shopping complex beginning in 2018, but three auctions failed, according to prosecutors.

Prosecutors alleged that Sheen later reached an agreement with Lin Ke-ming (林克銘), then chairman of China Petrochemical Development Corp. (CPDC), which is under the Pacific Group's corporate umbrella, to have CPDC participate in the auction.

CPDC's board subsequently approved a resolution authorizing its wholly owned subsidiary, Dingyue Development Corp., to join the bidding process.

The indictment said Dingyue's board authorized then Chairman Chu Yea-hu (朱亞虎) to bid up to NT$37.59 billion for the land.

Prosecutors alleged the valuation was based on appraisals by three property assessment firms after Sheen instructed them to inflate the land price estimate, despite executives knowing the site's fair market value was closer to NT$30 billion.

They added that some appraisers had warned the valuation was excessively high, but then-CPDC Chairman Chen Jui-long (陳瑞隆) and other executives ignored the concerns.

Dingyue ultimately acquired the land for NT$37.21 billion in September 2019, prosecutors said.

According to the indictment, proceeds from the transaction were later distributed among 39 Sheen-controlled affiliates and used in part to repay Sheen's gambling and other debts.

In addition to Sheen, prosecutors also indicted 12 other individuals in connection with the case.

Among them, prosecutors are seeking a 12-year prison term and a NT$20 million fine for Chen, while Lin faces a recommended seven-year sentence and a NT$10 million fine. Chu also faced a nine-year jail term.

The indictment comes after the Taipei District Court sentenced Sheen to 10 years in prison on March 26 for bribing former Taipei Mayor Ko Wen-je (柯文哲) in connection with the redevelopment of the site of the now-demolished mall during Ko's second term in office from 2018 to 2022.