46 execs charged with port fraud

KAOSHIUNG    PORT OPERATORS    CONTAINER VOLUME

Taiwan - Prosecutors in Taiwan have indicted 46 people from Kaohsiung harbour and various shipping firms for colluding to inflate container volume to raise the port's global ranking.

The Kaohsiung Prosecutors' Office announced the indictment last week following a year-long investigation into the alleged fraud involving the Kaohsiung Harbour Bureau's top three officials and various shipping firm executives, the United Daily News reported.

The suspected fraud is believed to have begun in 2006, when Kaohsiung Harbour enacted a three-year plan to boost the port's container handling capacity. The plan offered cash rewards to Kaohsiung Harbour officials if container volume increased. It also offered incentives and discounts to shipping lines if more containers were sent to Kaohsiung.

Harbour officials are suspected of colluding with shipping firms to fake container volume and split the rewards. As a result, the container volume at Kaohsiung Harbour surpassed 10 million TEUs (20-foot equivalent units) in 2007, prosecutors said.

Those indicted include 21 government officials, bureau director Hsieh Ming-hui, vice director Huang Kuo-ying, harbour master Tsai Ting-yi and a dozen mid and lower level harbour officials, the Taipei Times reported.

The other 25 are employees of shipping firms from Yang Ming Marine Transport Corp, APL Ltd, Evergreen Marine, Wan Hai Lines Ltd and NYK Logistics.

The Kaohsiung Harbour Bureau director general and other officials were alleged to have paid the freight lines a total of about T$300 million (US$9.12 million) since 2007 to exaggerate shipping volumes, said Chung Chung-hsiao, a spokesman with the Kaohsiung prosecutor's office.

"We don't know their motivation, but we do know they were exaggerating," Chung said.

Chung continued, "We have to do what we have to do. So much money and so many faked documents... it's pretty big."

Hsieh have since denied any wrongdoing, saying he followed the rules and if there was any discrepancy in the figures, that would be the shipping companies' responsibility, the Taipei Times reported.

Kaohsiung Harbour's ranking has slipped in recent years, largely due to China's strong port expansion policy.

In 2008, Kaohsiung port fell out of the world's top 10 container ports ranking, dropping to 12th from seventh the year before.

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