Wed, Oct 02, 2024 page3

• Ex-FAT boss sentenced to 14 years for embezzlement

  • Staff writer, with CNA
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  The Taipei District Court on Monday sentenced Chang Kang-wei (張綱維), former chairman of the now-defunct Far Eastern Air Transport Corp (FAT, 遠東航空), to 14 years in prison after finding him guilty of embezzling corporate funds and other crimes.

  He was also given another one-year sentence that can be commuted to a fine, said the court, which also ordered the confiscation of his illegal gains of NT$3 billion (US$94.23 million).

  The decision can be appealed.

  

  The entrance to the Taipei District Court is pictured in an undated photograph.

  Photo: Chen Wei-tzu, Taipei Times

  Chang was also indicted on charges of fraud, special breach of trust and contravening the Securities Exchange Act (證券交易法), all involving his use of the airline to finance personal businesses.

  The airline had struggled financially from the 2000s to early 2020, when it ceased operations and had its air operator certificate revoked.

  In 2008, FAT faced a financial crisis due to alleged illegal acts by another former chairman, Stephen Tsui (崔湧) and other executives, and filed a restructuring application with a local court, which was granted on Feb. 23 that year.

  After FAT announced bankruptcy, Chang took over its management in 2009 by allegedly producing falsified financial statements of his own business conglomerate Huafu Enterprise Holdings Ltd (樺福集團) and saying it had sufficient funds to invest in FAT, the Taipei District Prosecutors’ Office indictment said.

  After FAT emerged from bankruptcy restructuring in 2015, the airline quickly experienced a severe financial deficit the next year, in part due to Chang’s maneuvers, it said.

  In October 2015, Chang negotiated a NT$1.3 billion loan at a 6.5 percent interest rate for FAT, but then allegedly transferred the funds to Huafu while leaving FAT saddled with the relatively high interest rate loan, the indictment said.

  In addition, prosecutors said Chang negotiated a NT$2.2 billion loan for FAT from Taiwan Cooperative Bank in July 2016, which he allegedly used to pay off the NT$2.25 billion Huafu owed to Entie Commercial Bank.

  He also allegedly continued to misappropriate more than NT$800 million in funds from FAT, they said.

  Facing an audit of FAT’s accounts by the Civil Aviation Administration, Chang allegedly forged five receipts saying they were IOUs for funds lent by FAT to Huafu, they said.

  Realizing that FAT was cash-strapped, the agency ordered it to recoup the NT$3.1 billion it was supposedly owed by outside parties.

  Fearing that FAT would be fined by the agency and have its flight schedule disrupted, Chang bundled and transferred Huafu’s “Xiaopingding” property development project in Tamsui to the airline, to satisfy the agency’s request and offset the NT$3.1 billion of receivables in FAT’s accounts, they said.

  Chang knew that sales of the project’s units were sluggish, they said.

  As a result, the airline took over a large number of unfinished buildings and a real-estate project that was difficult to develop and incurred significant losses, prosecutors said.
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