China’s State Administration of Taxation has uncovered a tax fraud case at bankrupt shipyard Mingde Heavy Industry.
According to the administration, Mingde Heavy Industry made fake contracts and legal certificates for a shipbuilding contract with a Greek owner in order to secure an export tax rebate of RMB18.54m ($2.73m) between 2010 and 2014.
Authorities have arrested three senior officials at the yard including Ji Fenghua, president of Mingde.
Mingde Heavy Industry, once the largest chemical tanker builder in the world, went bankrupt in 2015 after its largest creditor Sainty Marine applied to liquidate the yard, and all three auctions to sell the shipyard’s assets have failed due to there being no bidders.
The bankruptcy of Mingde triggered the bankruptcy of Sainty Marine, which will quit the shipbuilding business upon completion of an ongoing restructuring process.