Tue, May 20, 2008 - Page 2 News List

Committee passes FAT resolution

IN A NOSEDIVE CAA director-general Billy Chang said the government had neither the responsibility nor funds to bail out the airline after it made bad investments

By Shelley Shan  /  STAFF REPORTER

The legislature’s Transportation Committee passed a resolution yesterday asking the Ministry of Transportation and Communications (MOTC) and the Bureau of Investigation to jointly look into whether any government official is involved in the Far Eastern Air Transport (FAT) financial crisis.

The two organizations have also been asked to submit their reports in two weeks.

The resolution was proposed by Chinese Nationalist Party (KMT) Legislator Lee Hung-chun (李鴻鈞) after FAT and Phnom Penh-based Angkor Airways unexpectedly suspended operations earlier this month.

Both FAT’s former chairman Stephen Tsui (崔湧) and its former president Philip Chen (陳尚群) were detained for allegedly embezzling NT$2 billion (US$65.6 million) from the airline.

Alex Lou (樓文豪), chairman of Angkor Airways’ Taiwan branch, was also placed in custody on charges of breach of trust.

In a question and answer session yesterday, Lee singled out Far Eastern Group, FAT’s largest shareholder, for criticism as it was unwilling to increase its shareholding in the airline to help the company through a difficult period.

“You can’t always ask the government to clear up the mess,” he said.

Another KMT Legislator Chen Ken-te (陳根德) added that FAT’s international flights had been highly unprofitable. Because of this, some of the company’s overseas representatives could not return to Taiwan because they have been grounded by legal authorities in the countries where they are based, he said.

Other lawmakers criticized the Civil Aeronautics Administration (CAA) for failing to have a full grasp of the airline’s financial situation.

KMT Legislator Liao Kuo-tung (廖國棟) asked about the possibility of the government taking over the company’s operations.

In response, CAA director general Billy Chang (張國政) said the government had neither the responsibility nor the funds to bail out FAT.

Chang said that FAT was a succesful domestic carrier but a series of bad investments had caused it to lose up to NT$10.2 billion.

He added that the court had issued an emergency order to protect the airline from creditors while it addresses its financial problems. The deadline, however, is this Thursday, he said.

Chang said the company had applied for a court extension of three months to allow it sufficent time to find new investors.

He added that U-Ming Marine Transport Corp (裕民航運), a member of the Far Eastern Group, had agreed only to increase its shares in FAT to 15 percent and insisted that other major shareholders increase their share amounts accordingly based on their respective percentage of shares in the company.

China Airlines and China Development and Industrial Bank, two other major shareholders, were unwilling to increase their stakes.

“Some private investors have shown interest in the company,” he said, refusing to disclose any names.

This story has been viewed 2137 times.
TOP top