Prosecutors and financial regulators yesterday said that they have a list of people associated with TransAsia Airways Corp (復興航空) and the airline’s affiliated companies who are suspected of insider trading in the period leading up to the airline’s announcement that it is to dissolve, while there are moves to probe possible fraud by TransAsia chairman Vincent Lin (林明昇) and the rest of the airline’s board.
The Taipei District Prosecutors’ Office summoned three top-level TransAsia managers to answer questions about the airline’s sales and marketing activities.
They were released after questioning.
Prosecutors said they are focusing on suspected insider trading after unusual trading of company shares on Monday, as well as the business conduct of Lin and other top executives amid a marketing campaign during a travel show this month for discounts on international flights.
Media personality Vivian Tsai (蔡玉真) accused Lin of being the main culprit behind the downfall of Taiwan’s first privately operated airline, saying that he had led the company to ruin by expanding to too many international destinations too quickly and exceeded the firm’s financial capability with purchases of new aircraft.
Tsai said that Lin had mismanaged the company and neglected essential aviation safety issues, leading to two major crashes in recent years: Flight GE222 near Penghu’s Makong Airport on July 23, 2014 and Flight GE235 in Taipei’s Nangang District (南港) on Feb. 4, last year.
“TransAsia was selling air tickets at a big promotional event at the Taipei International Travel Fair earlier this month,” she said.
“This was clearly fraud, designed to cheat consumers by getting money to bolster company assets when they had already decided to cease operations,” she said.
Charges of fraud, insider trading and stock price manipulation based on the circulation of false reports, as well as other breaches of the Securities and Exchange Act (證券交易法), are being considered, the prosecutors’ office said.
Financial Supervisory Commission officials are working with prosecutors to investigate potential financial irregularities and fraud, with a prosecutors’ office task force headed up by special unit prosecutors Lin Tsung-chih (林宗志) and Chen Tsung-hao (陳宗豪), it said.
After searches in recent days to gather material, and review records at the Taiwan Stock Exchange and TransAsia offices, prosecutors said they have drawn up a preliminary list of people to question in the next few days who are suspected of insider trading.
The people include several major shareholders and others associated with top executives of the airline and affiliated companies, prosecutors said.
The affiliated companies are those associated with TransAsia’s parent company, SIGMU Group — headed by chairman Lin Shiaw-shinn (林孝信), Vincent Lin’s father — which also includes Taiwan SECOM (中興保全) and Goldsun Development and Construction Co (國產實業).
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