Taiwanese opposition legislator Chen Hsueh-sheng of the Kuomintang has been searched and questioned by prosecutors and investigators over allegations that he fraudulently claimed assistants' subsidies and accepted benefits from shipping operators. He was released early in the morning on NT$2 million bail, in a development that is bad news for both the KMT and the shipping companies involved.

• Prosecutors and investigators fanned out across 35 locations to search Chen Hsueh-sheng's residence, his legislative office and companies linked to the case, questioning 27 people.
• The main allegation is that he used relatives and friends as nominees to fraudulently claim publicly funded assistants' subsidies, with one assistant's salary reportedly paid for by a business operator.
• A second line of inquiry alleges that Chen Hsueh-sheng used his authority as a legislator to convene coordination meetings, pressuring CPC Corporation to terminate its contract with Jin Hsin Shipping ahead of schedule, sparing the operator subsequent liabilities.
• Chen Hsueh-sheng was released on NT$2 million bail and business operator Huang Yu-ju on NT$1 million bail, with both barred from leaving the country or putting to sea.

Outlook: The case is being investigated as a violation of the Anti-Corruption Act, and the subsequent tracing of money flows will determine whether charges are filed. It could also affect the KMT's image and add to the pressure on its seat count in the Legislative Yuan.