Taiwanese prosecutors are seeking prison terms of up to 18 years for former executives of Far Eastern Air Transport Corp (FAT, 遠航), accusing them of embezzling, forgery and breach of trust surrounding the collapse of the insolvent airline.
Former chairman Stephen Tsuei (崔湧) faces 18 years in jail and Benny Hu (胡定吾), another former chairman, may get a six-year sentence, while former president Philip Chen (陳尚群) could spend 14 years in prison, the Taipei District Prosecutor’s Office said in a fax yesterday.
FAT on May 22 was granted a 90-day extension of its court protection from creditors after it stopped services because it lacked enough cash to continue operations. The defendants are alleged to have embezzled funds, contributing to the collapse.
Alex Lou (樓文豪), an executive of Angkor Airways Corp, an affiliate of FAT, was also charged and is facing five years in prison. Five other people have been indicted, the statement said.
Tsuei, Chen and Lou were earlier detained as part of the investigation, with Chen later released on NT$4 million bail (US$127,000) and Lou released on NT$2 million, the statement said.
Lee You-te (李有德), spokesman for Taipei-based FAT, didn’t answer calls to his office or mobile phone yesterday.
Hu, who left FAT in 1998 and is now chairman of the Taipei-based private-equity fund Whitesun Equity Partners (華生資本), denied the charges and said he was not aware of any wrongdoing by either Tsuei or Chen.
He said he had not been informed of the charges and had had no contact with investigators or prosecutors since he was questioned in May.
“Maybe they need a scapegoat for why Far Eastern went under,” Hu said in a phone interview yesterday. “I was amazed at what happened to Stephen Tsuei and Philip Chen with them [prosecutors] seeking such long prison terms.”
Meanwhile, the Civil Aeronautics Administration said yesterday it would decide how to deal with FAT after a court finalized the company’s request to restructure its finances.
Administration Director-General Lee Long-wen (李龍文) confirmed that the company still owed the administration airport landing fees and other miscellaneous charges — a total of approximately NT$160 million.
Lee said it could be months before the administration receives the money and that it may not be able to secure the full sum from the company.
The debts, once paid, will go to the civil aviation operation fund.
Lee said that the administration would also conduct an internal investigation to see whether its staff had followed legal procedures in seeking the payments from FAT.
Lee reiterated yesterday that the government would not take over the company if it goes bankrupt.
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