Core Pacific Group chairman Shen Ching-ching appeared in the Taipei District Court for the first time, flatly denying charges of breach of trust and money laundering in the Jingmei City land tender case — a major negative development both for him personally and for shareholders of China Petrochemical Development Corporation (CPDC).

• Prosecutors allege that Shen orchestrated a bid by a CPDC subsidiary to win the Jingmei City land at a price of NT$37.2 billion, far above the market rate of around NT$30 billion, and are seeking a 26-year sentence.
• Shen told the court he had a clear conscience, saying the high bid was the best business decision available as CPDC sought to transform itself after years of losses in its core petrochemical business.
• Prosecutors contend that proceeds from the land sale flowed through a capital reduction to 39 affiliated companies under his control, which then issued cheques worth more than NT$2.9 billion, used to repay overseas gambling debts and buy property abroad.
• A separate NT$500 million prepayment from Ting Yueh to Jingmei City is also at issue, half of which allegedly went to Core Pacific Group affiliates and to Shen's personal accounts.
• Shen countered that both the valuation and the prepayment were business judgements made after discussions with lawyers and accountants, and that prosecutors were second-guessing with hindsight.

Outlook: The Taipei District Court has scheduled multiple hearing dates, and the trial is expected to run for several months, leaving uncertainty over CPDC shareholders and the disposal of Core Pacific Group assets.