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China Airlines chairman to be questioned in probe

Prosecutors yesterday said they would soon summon Ringo Chao (趙國帥), chairman of China Airlines Ltd (CAL, 中華航空) for questioning in their investigation into alleged irregularities in a major aircraft purchase.

Prosecutors from the Supreme Prosecutors Office’s Special Investigation Panel said they have summoned several officials from CAL, Taiwan’s largest air carrier, and the China Aviation Development Foundation (航發會), but none of them are listed as defendants.

The foundation is CAL’s largest shareholder.

Prosecutors said they seek to determine whether anyone committed offenses of malfeasance in office, offenses of breach of trust, or offenses of misappropriation in the purchase allegation.

The investigation was prompted by media reports of alleged irregularities in CAL’s NT$120 billion (US$3.97 billion) deal with European aircraft manufacturer Airbus to buy 20 A350-900s.

Ringo Chao was accused of being overly hasty in signing an agreement in January to buy aircraft that were still in development and would not be delivered until 2015.

Prosecutors said they decided to summon Chao for his central role in the purchase, and that the investigation would be complete after Chao’s interview.

The Airbus price was NT$16 billion more than the maximum price set by former CAL chairman Philip Wei (魏幸雄), media reports said.

According to the agreement, Airbus would begin delivery of 14 of the 20 aircraft ordered in 2015, to replace CAL’s six A340-300 passenger aircraft. The deal included an option to buy another six aircraft.
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