MAINBOARD-LISTED Mun Siong Engineering : MF6 0% has decided to refund a bid deposit and pay penalties aggregating NT$1.14 million (S$48,501) for two of its projects with Taiwan&rsquo s state-owned CPC, after new charges were made in relation to bribes paid by its former consultant.

 

Mun Siong will recognise the refund of the NT$1.08 million bid deposit for its CPC Taoyuan Project and penalties aggregating NT$64,000 as an expense in the third quarter ending Sep 30, 2023, it announced in a Friday (Oct 6) bourse filing.

 

The penalty amount of NT$24,000 for its CPC Talin Project 2019 will be deducted from the existing CPC projects. Meanwhile, Mun Siong will be remitting cash to CPC Taoyuan for the penalty amount of NT$40,000 and the NT$1.08 million bid deposit refund, &ldquo as no deduction can be made without any existing project with CPC Taoyuan&rdquo .

 

The latest claims follow demands of payment made in 2022, after a consultant at the branch office &ldquo allegedly paid bribes to certain employees within CPC&rdquo . They were imposed in response to new charges laid by the prosecutor against Mun Siong&rsquo s former consultant relating to bribes paid to another CPC employee in exchange for past tender proposals and information for the two projects.

 

&ldquo From the indictment document, one of the bribes took place in 2018 (to obtain information for CPC Talin Project 2019) even before the incorporation of the branch office in 2019,&rdquo Mun Siong noted. &ldquo The company/branch office only engaged the consultant in 2019 after it decided to enter the Taiwan market in that year.&rdquo

 

The company is serving a three-year suspension ending December 2025, in which time it and its branch office cannot participate in government contracts under the Government Procurement Act of Taiwan. It believes that other legal entities within the group are excluded from the suspension.

 

While the company disagrees with the claims, CPC has responded to disagree with its defence, Mun Siong said. It has been advised by its counsel that the ruling by an independent appeals committee pertaining to the earlier charges &ndash that the consultant was deemed an agent of the branch office and the company was liable for his actions &ndash may prevail.

 

&ldquo If we do not pay CPC Taoyuan, they are likely to initiate a civil lawsuit against the company/branch office to demand payments,&rdquo Mun Siong said. &ldquo To avoid a further increase in costs to the group, we have decided to make the payments.&rdquo

 

Previous payments demanded by CPC, including the bid deposit for the CPC Talin Project 2019 and penalties for both projects, totalled NT$6.09 million and were expensed off in the financial year ended Dec 31, 2022.

 

The company said that, based on its observations, CPC&rsquo s tendering processes focus primarily on the vendor&rsquo s execution processes and pricing, guided by internal costing estimates.

 

&ldquo Obtaining information on past tender proposals, which we understand to be the reason the consultant is currently being indicted for bribery, provides no advantage to us.&rdquo