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Taoyuan County to cancel Farglory housing project contract
Taiwan News, Staff Writer
2014-06-11 11:55 AM
The Taoyuan County Government announced Tuesday that it is canceling its contract with Farglory Construction for the Ba-de Affordable Housing Project after the firm’s chairman Chao Teng-hsiung was indicted on bribery charges related to the project. The government said Farglory’s NT$129 million performance bond for the project will be forfeited.

A spokesperson for Farglory responded to the county government’s decision, saying the company has been informed of the move and plans to contest forfeiture of the bond. He added that regardless of what happens regarding the performance bond, it will not have a significant impact on Farglory’s business dealings.

The ultimate fate of the bond for the Bade housing project is uncertain at present. Meanwhile Farglory is seeking a NT$15.4 billion syndicated loan to finance construction of the Taipei Dome project in Taipei. The loan for the dome, reportedly the largest ever sought by Farglory, is for a BOT project which is considered a low credit risk, and should not be a problem, according to a company spokesperson. Farglory is said to be footing 40 percent of the overall cost itself and currently has no plans to ask for any changes in the terms for the loan.

Some of the banks participating in the loan are reported to have ‘expressed concern’ to Farglory after Chao was remanded on bribery charges. The Land Bank held a meeting Friday to discuss the situation regarding "Farglory U-Town" with other members of the consortium. They decided to continue funding the project, with three conditions added as a firewall to protect their interests.

The syndicated loan for the Farglory dome project is being led by Mega International Commercial Bank and involves a total of 11 banks including the Mega Bank, the Bank of Taiwan, the Land Bank, the Cooperative Bank, First Bank, Huanan Bank, Changhwa Bank, Taiwan Business Bank, Cathay United Bank, Agricultural Bank of Taiwan, and Taichung Commercial Bank.

Chao Teng-hsiung is being held incommunicado at the Taipei Detention Center, where he has been for ten days. His wife brings food and personal items daily and also brought several books for Chao to read on her latest trip to the center.

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