FAT denies Next Media allegations of asset theft by CEO
Thursday, January 8, 2015
The China Post news staff
TAIPEI, Taiwan — Far Eastern Air Transport (FAT, 遠東航空) yesterday refuted a Chinese-language magazine’s claim that the airline’s president hollowed out about NT$500 million of company assets.In its latest issue, Next Magazine (壹週刊) accused FAT President Chang Kang-wei (張綱維) of using the company to enrich himself by about NT$500 million.
In particular, the magazine alleged that Chang used his own Hua Tai Co. (樺壹公司) to purchase three aircraft and rented them to FAT at inflated prices from 2011.
FAT’s troubled 2014 financial report has yet to be published, and the case is currently under investigation by the Financial Supervisory Commission (金管會), according to the magazine.
Lu Chi-jung (盧紀融), spokeswoman of the Taipei-based airline, yesterday called the accusation a deliberate attempt to interfere with the fiscal reorganization of the company.
The international market price for the MD-82/83 aircraft in question is US$80,000 per month, and FAT paid below-market rent of US$50,000, Lu said.
Every month, the Civil Aeronautics Administration (民航局), conducts a strict financial review of the airline, Lu said, adding that all relevant records have been made public.
Concerning the delayed publication of the company’s financial report, Lu attributed it to a personnel change on the accounting team. Any replacement in that team must first be approved by a supervisory board, she said.
She added that Chang has no incentive to hollow out company assets because 99.7 percent of company shares are held by President Chang.
“He is also the company’s sole investor,” she said.
Chang is a property developer who took over management of FAT in July 2009 amid financial woes.
In 2008, the airline suspended all flights and filed for bankruptcy protection.
The airline obtained court approval for its financial restructuring plan in 2009 and resumed operations in April 2011.
Two New Routes
Lu announced that the airline’s financial restructuring program is scheduled for completion this year and should be announced after Spring Festival.
FAT aims to be “the only airline (in Taiwan) with zero debt,” she said.
In June, the airline expects to launch two new routes: Greater Taichung (台中) to Osaka and Greater Taichung to Nagoya.