Prosecutors search airline offices in embezzlement probe

Taipei prosecutors searched the headquarters of cash-strapped Far Eastern Air Transport (FAT, 遠東航空) yesterday and summoned its former officials for questioning in connection with an embezzlement investigation.

The Taiwan branch of Cambodia’s Angkor Airways Corporation (AAC) in Taipei was also raided yesterday.

Prosecutors said that they searched seven locations altogether, seizing a number of documents.

Former FAT chairman Stephen Tsui (崔湧), former FAT president Philip Chen (陳尚群) and former president of FAT’s finance division Robert Wu (吳勇璋) were all summoned for questioning by prosecutors and agents from the Ministry of Justice’s Investigation Bureau yesterday. Five other FAT financial officials were also questioned.

Questioning continued as of press time.

FAT had said it had net assets of NT$3 billion (US$10 million), with NT$1.4 billion in receivables, including NT$700 million owed by AAC, backed by US$39 million in assets as collateral.

Prosecutors said they had received letters of complaint saying that FAT had lent its air carriers to AAC, but the latter did not pay any money to the company and the debts had accumulated to NT$700 million by the end of last year.

The letters alleged that FAT overestimated the US$39 million in assets used as collateral, saying that FAT officials might have violated the breach of trust in the Criminal Code.

Prosecutors said the complaint letters alleged that FAT officials illegally profiteered from the AAC.

They also said they were investigating the details of FAT investment proposals that may have caused the company’s financial difficulties.

Prosecutors said the complaint letters alleged that FAT officials had pocketed funds under the investment proposals.

The airline company filed for corporate restructuring with the Taipei District Court in February, which makes it temporarily exempt from paying its debts.

The case is still pending with the district court.