Former Civil Aeronautics Administration (CAA) director-general Billy Chang (張國政) might have violated securities laws after his surprise announcement of plans to acquire TransAsia Airways Corp (復興航空) sent shockwaves through the market, causing wild swings in the troubled carrier’s share price, the Taiwan Stock Exchange said yesterday.
Taiwan Stock Exchange Chairman Shih Jun-ji (施俊吉) said that trading data on TransAsia shares had been turned over to authorities who are investigating allegations of insider trading and market manipulation.
“Chang has an obligation to explain his actions to prosecutors and prove that he did not break rules against spreading false information,” Shih said by telephone, adding that Chang’s actions had clearly affected TransAsia’s share price.
“While Chang might not be able to reveal who were TransAsia’s prospective buyers to the public, he must disclose the information to prosecutors,” Shih said.
Chang could face between three and 10 years in prison and be fined between NT$30 million and NT$100 million if he is found guilty of profiting or helping others profit from trading TransAsia shares, Shih added.
Chang said he did not manipulate the market and that he knew nothing about equity investment.
On Tuesday, TransAsia shares swung wildly, opening 10 percent lower at NT$3.08 before rallying shortly after Chang held a news conference and said that a team of unidentified backers are ready to take over the cash-strapped airline.
The stock closed up 10 percent higher at NT$3.76, with turnover surging to 55.92 million shares, the highest since the company’s listing in 2011.
The CAA stripped TransAsia of its aviation rights, effective midnight Tuesday, despite Chang’s appeal to delay the move.
Chang held another news conference yesterday announcing that the team of backers had scuttled their plans after TransAsia’s aviation rights were retracted.
TransAsia shares plunged 10 percent to NT$3.39 on opening and stayed there until closing, with turnover retreating to 3.43 million shares.
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