Investigators yesterday searched the headquarters of TransAsia Airways (復興航空) and questioned the firm’s top executives on suspicion of financial irregularities, following the airline’s abrupt dissolution due to heavy financial losses.
TransAsia chairman Vincent Lin (林明昇), chief executive officer Liu Tung-ming (劉東明), and chief financial officer Yang Hsuan-yi (楊炫儀), were released after questioning by prosecutors yesterday morning.
The company’s chief legal officer, Fang Shiu-chung (方修忠), was also brought to the Taipei District Prosecutors’ Office for questioning and released last night.
Photo: CNA
The executives were questioned after Taiwan Stock Exchange chairman Shih Jun-ji (施俊吉) said there were “clear signs of insider trading” involving the company’s shares on Monday afternoon, prior to the airline announcing its decision to suspend operations.
Financial Supervisory Commission officials said trading of TransAsia shares saw frenzied selling and an unusual spike on Monday. Trading was suspended yesterday.
Deputy chief prosecutor Chang Chieh-chin (張介欽) said his office was instructed by the Ministry of Justice to look into suspected insider trading.
He confirmed that Taipei District Prosecutors’ Office Director Hsing Tai-chao (邢泰釗) convened an emergency meeting on Monday night, at which he formed a task force composed of prosecutors and units from the ministry’s Investigation Bureau to investigate the case.
Chang said that they searched the Taiwan Stock Exchange after the market closed on Monday, and then searched TransAsia’s offices yesterday afternoon to gather company documents and financial records, and to guard against tampering or destruction of evidence.
People associated with TransAsia Airways are suspected of selling company shares during Monday’s trading session as rumors that the airline would soon suspend operations began to leak and were made public by media reports, investigators said.
At one point during the trading session on Monday, TransAsia denied the rumors and its share price spiked briefly, with the company saying there was a glitch in its booking system, which made it impossible for passengers to buy tickets after this month.
The company later announced that it had canceled all flights scheduled for yesterday, affecting more than 5,000 passengers.
Media reports said that prior to the company’s official announcement of a service suspension, people with advance knowledge were selling shares to avoid losses, but individual investors who bought shares at the lower prices were stuck, as trading was suspended yesterday.
At a news conference held to announce the airline’s dissolution yesterday afternoon, Lin denied charges of insider trading.
“I did not sell one single company share yesterday,” he said.
Additional reporting by CNA
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