TAIPEI (Taiwan News) — Prosecutors in Taiwan are seeking harsher punishment for Chang Kang-wei (張綱維), chairman of Far Eastern Air Transport Corp. (FAT), on charges of fraud, abuse of trust, embezzlement, and violations of the Securities and Exchange Act among other offenses.
Chang has been accused of misappropriating NT$3.5 billion (US$120 million) from FAT, reported CNA. The carrier’s operating license was revoked in January following the abrupt suspension of flights in December that led to a revelation about the company’s financial woes.
According to the Taipei District Prosecutors Office, Chang has since 2015 channeled NT$1.36 billion of FAT revenue to Huafu Enterprise Holdings Ltd (樺福集團), which he owns. In addition, Huafu was found to have transferred its debt — amounting to NT$2.23 billion — to the airline in a commercial loan involving Taiwan Cooperative Bank, wrote UDN.
Chang also masterminded a years-long fraud involved in FAT's restructuring after it filed for bankruptcy in 2008. He ultimately secured a green light to resume flights in 2015 by cooking the books and producing falsified financial statements, prosecutors found.
A resurgence of financial problems resulted in the halting of flights in December and subsequent layoffs of nearly 1,000 employees, and Chang has since been held incommunicado while being investigated. Prior to the suspension of services, the airline operated 62 routes to 47 cities around Asia.