The Kaohsiung District Prosecutors Office in Taiwan has concluded its investigation into the case of the “Jin Zhan International Trading Company” and multiple related enterprises importing Chinese Sudan Red Chili Powder. On the 6th, they charged Jin Zhan and 6 other companies along with their actual responsible person, Li Yanting, on charges of violating the Food Safety and Health Management Act, fraud, and seeking illicit gains. They have requested the confiscation of over 39.94 million New Taiwan Dollars as criminal proceeds and fines totaling 1.2 billion New Taiwan Dollars for 6 companies. The Kaohsiung City government has also imposed fines totaling over 80 million New Taiwan Dollars.
The New Taipei City government discovered that after the food importer Power-Hsin Company imported Chinese Sudan Red Chili Powder, the Kaohsiung City government suspected that more than just this company’s products were problematic. They initiated a comprehensive inspection on the supply chain on February 22nd, and on the 29th of the same month, found traces of Sudan Red in related products. After confirming this on March 1st, they traced the raw materials back to the “Jin Zhan International Trading Company.” They also discovered that there were 5 other companies located at the same address as Jin Zhan, as well as 3 other companies at a neighboring address, all belonging to the same family enterprise.
The prosecutors pointed out that Li Yanting is the actual responsible person for 8 companies including Jin Zhan International Trading, Guangyuan International Trading, Jia Guang International Trading, Haishun International Food, Chuyi Food Co., Busan International Trading, Jie Zhan International Food, and Longhai Tongji Food. He is also the executive director of China’s Longhai Tongji Food Company. His brother, Li Shiming, serves as a supervisor of Longhai Tongji Company in China, responsible for managing the company’s production and sales operations in China.
Longhai Company in China purchases raw materials for making chili powder from unspecified rural areas in China and conducts initial processing. Li then imports chili powder from Longhai Company in China using the names of several companies to lower the chances of detection of Sudan Red during border inspections.
In 2020, Li falsely claimed to a well-known food host, James, that Jiaguang Company’s Xiangma Chili Powder was produced in Taiwan. He was entrusted to produce the company’s self-created brand “James Powder” with Sudan Red Chili Powder from China and fraudulently obtained over 13.83 million New Taiwan Dollars. Jiaguang Company then shipped 1,500 kilograms of Green Chili Powder to Xiaomofang Company on February 23, 2021. After Xiaomofang or downstream manufacturers found Sudan Red during self-inspection, they returned the goods, which were then resold to other manufacturers, profiting 1.28 million New Taiwan Dollars.
Li also imported Chinese chili powder through Haishun Company, but during customs inspection on August 12, 2021, Sudan Red No. 3 was detected. He ostensibly returned the container to Hong Kong and Longhai Company according to regulations. However, the contents were actually transferred to a different container and re-imported to Taiwan under the names of Jin Zhan Company and Guangyuan Company on September 19 of the same year. They successfully passed customs and sold all the goods to downstream manufacturers, making a profit of over 3.89 million New Taiwan Dollars.
As part of the companies Li controls had records of importing Sudan Red Chili Powder, he continued to commit crimes using Jin Zhan and Guangyuan Companies without such detection records from February 15, 2023. He also deliberately used Hong Kong as a transit point and applied for qualification reports for spices without Sudan Red Chili Powder to gain trust from downstream manufacturers, deceiving them of over 13.75 million New Taiwan Dollars by the end of February this year.
The prosecution also found that Li and others were aware of the public concerns about the quality of food originating from China but, to reduce operating costs, they illegally imported winter vegetables from China under the name of Busan Company since March 2021. After packaging, they falsely labeled the products as originating from Taiwan and sold them to physical stores or on the Chuyi Food Co. platform, unlawfully gaining over 7.11 million New Taiwan Dollars.
After the scandal was exposed, Li immediately divorced his wife Wu Kemin and instructed Wu and an unaware cashier from Jiaguang Company to withdraw over 28.31 million New Taiwan Dollars from accounts including those of Li, Wu, Busan Company, and Jiaguang Company. Out of this, 21.6 million New Taiwan Dollars were hidden in the ceiling of Wu’s residence, 2 million New Taiwan Dollars were given to a lawyer, and the whereabouts of the remaining funds are unknown.
The prosecutors concluded on the 5th that Li, Wu, Wu’s older sister, factory director Xu from Haishun Company, brand supervisor Li, and employee Xie were to be charged with violating the Food Safety and Health Management Act, fraud, selling falsely labeled goods, money laundering, and other crimes. They recommended heavier sentences and the confiscation of a total of 39.94 million and 1.41 million New Taiwan Dollars in criminal proceeds. Additionally, fines were imposed on Jin Zhan, Guangyuan, Jiaguang, Haishun, Chuyi Food Co., and Busan, totaling two billion New Taiwan Dollars.
Furthermore, the Kaohsiung City Government Health Bureau stated that in addition to the fines imposed for products containing Sudan Red chili powder and actively investigating 36 cases of expired food, a total of 77.72 million New Taiwan Dollars have been fined. For the winter vegetable products involving false labeling, the highest fine of 4 million New Taiwan Dollars was imposed. In total, fines amounting to 81.72 million New Taiwan Dollars were imposed, and the case was forwarded to the Ministry of Justice’s Administrative Enforcement Agency Kaohsiung Enforcement Divisio.