A Small Shell Company Won Big Government Tender
Summary Report by Taiwan Weekly
With the sharply surging pandemic situation in Taiwan but an insufficient supply of rapid test kits, the Ministry of Health and Welfare (MOHW) gave a project approval for 22 companies to import test kits, one of which was Golden Global Biomedicine, Ltd. The company was disclosed as having a capital of only NT$2 million (about US$67,440), but won a bid of an order for 1.6 billion rapid test kits, suspected of benefit transfer therein. The Kuomintang (KMT) caucus of the Legislative Yuan requested on April 6 to publicize the minutes of resolution meeting for winning bidders. They also went to the Control Yuan to accuse both Minister of Health and Welfare Chen Shih-chung and Director-General Wu Hsiu-mei of the Food and Drug Administration (FDA), MOHW, of malfeasance while urging the Control Yuan to investigate the fraud case of Golden Global Biomedicine.
Councilman Yeh Yuan-chi of the New Taipei City Council also disclosed that Golden Global Biomedicine was with only three staffers, its director was not only in debt of NT$ 600,000 (about US$20,200) but also violated the Pharmaceutical Affairs Act, even was sued for fraud under investigation by prosecutors.
Legislator Tseng Ming-tsung, whip of the KMT caucus, ironized this was “The Legend of a Delicatessen.” He indicated that Golden Global Biomedicine was a one-shareholder company with two employees and a capitalization of NT$2 million, formerly a delicatessen with no background of medical professionalism. Its director was sued for involving in a fraud case. Currently the registered address of the company was vacant. A company as such even could undertake an importation of 1.6 billion rapid test kits from the MOHW.
Under the pressure of public opinion, Golden Global Biomedicine suddenly publicized a statement abandoning its bidding. When questioned, Minister Chen with a long sigh stating that we have strived for quick screening agents for our nationals but without the said quantity of supply, we have to look for elsewhere. He even said this hurt a bona fide businessman, a case of political intervention in business.
In a press conference on May 6, Chairman Liu Wei-tse of Golden Global Biomedicine stated that at first the company placed a tender bid of NT$2 million and sought capital assistance from Chair Lin Chun-huei of Lead Data Inc. According to Liu, he was responsible for negotiating contracts with Korean companies himself. But it was all too rushed to achieve, so he abandoned the bidding, nothing to do with politics. Liu stated that even if the KMT did not criticize him, he still could not achieve it. As regard to his own lawsuit which has entered into legal process, Liu would not comment further.
The KMT indicated that this proved the ruling Democratic Progressive Party’s (DPP) buck-passing these two days trying to shift the focus and smear the KMT. The sloppy check of the MOHW allowing disqualified companies to join the tender was passing off fish eyes for pearls.
The KMT questioned that behind the procurement of quick screening agents there was a huge structure of “green-gold” connection network connecting the ruling party with businesses. Chairman Lin Chu-hui of the listed company Lead Data, the capital cooperation partner of Golden Global Biomedicine has a blood brother named Chen Chin-yi who was an adviser to Legislator Ker Chien-ming, whip of the DPP caucus of the Legislative Yuan.
Legislator Ker expressed that he acquainted with Lin when Lin was a journalist and Chen helped Ker when Ker was campaigning for election. Chen worked in the office of Ker as an assistant but quitted the following year and now Chen is a nominal advisor. Ker said “not to mess the case with me,” since it was an open tender, any company self-regarded as capable could participate in the tender.
However, Lead Data publicized on May 6 a major clarification pointing out that Golden Global Biomedicine claiming it was procuring 17 million doses of CELLTRION quick screening agents to which the government were willing to purchase urgently, but the price per dose was only NT$95 (about US$3.2) below the committed price offered by Korean company to Golden Global Biomedicine. Because there was no consensus on way of consideration payment, governmental and bank guarantees, and other matters, Lead Data has not yet signed contract with both Golden Global and Korean company, neither has provided Golden Global with any financial guarantee.
According to Legislator Lin Szu-ming, Golden Global transformed from a delicatessen into a biomedical company by the end of 2020 with no actual performance nor additional capital. Yet the FDA approved applications by Golden Global and 14 other companies to import medical devices on August 5, 2021. What were the criteria used behind such approval? The Central Epidemic Command Center (CECC) on May 2 sent a letter to Golden Global urging it to purchase rapid test kits; what other companies did the CECC also send such letters? The CECC was requested to publicize its review meeting minutes.
Legislator Lin further expressed that Golden Global did not have actual operation neither ever participated in government tender; after being disclosed, it immediately decided to abandon bidding. This is violation of the Government Procurement Act. This case is a common short-selling scam. With the letter from the CECC, Golden Global was able to peddle. Such a shell company without capital, manpower, equipment and experience, how can it obtain the procurement contract from the CECC? We call for investigation by prosecutors and thorough investigation by Control Yuan.
Minister Chen reiterated that all relevant negotiation procedures were carried out in accordance with the law, participating companies should meet three qualifications. Due to quickly growing demand for rapid test kits, there were nine companies which participated in the tender, all of them confirmed following a document review process.