Four people were yesterday charged with insider trading of TransAsia Airways shares, sold days before the airline announced its closure in November last year.
Former chairman Vincent Lin (林明昇) was not among those charged.
Lin’s aunt, Cheng Shan-shan (鄭珊珊), Ezfly International Travel Agency chairman Chou Yu-wei (周育蔚) and Partner Travel Service Co executive Liu Hsin-ping (劉信平) have been indicted, the Taipei District Prosecutors’ Office said.
An investigation was launched after senior airline employees were found to have sold large numbers of shares in the company on or before Nov. 21 last year, before rumors emerged after midday that the airline was about to cease its operations.
TransAsia initially denied the rumors, but announced later in the day that all flights on Nov. 22 had been canceled.
After a special board meeting on Nov. 22, the company said it was dissolving its operations due to deteriorating finances and that all flights would be halted, effective immediately.
The prosecutors’ office said it found that Cheng sold about NT$3.81 million (US$126,620 at the current exchange rate) worth of TransAsia shares on Nov. 18 and 21 based on advance knowledge of the airline’s planned closure obtained on Nov. 16, avoiding a loss of NT$1.38 million.
Liu and Chou also sold 3.42 million shares worth about NT$17.54 million combined on the morning of Nov. 21, after learning of the airline’s demise before the information was made public, the office said, avoiding losses of about NT$5.91 million and NT$440,000, respectively.
However, the airline’s former chairman and four other suspects were not charged due to a lack of evidence, prosecutors said.
In addition to insider trading allegations, Lin was accused of making inconsistent statements about the airline’s closure that led investors to sustain huge trading losses, embezzling company funds to purchase luxury cars, and fabricating the company’s financial statements.
Prosecutors said that there was not enough evidence to charge Lin for those offenses.
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