Ex-FAT chair cleared in NT$600 mil. graft case
The China Post news staff
September 30, 2012, 12:05 am TWN
Former Chairman Benny Hu of Far East Air Transport Corp. (FAT) was cleared Friday by the Taipei District Court of participating in a NT$600 million embezzlement scandal that erupted four years ago, although prosecutors demanded a six-year imprisonment for Hu on charges of breach of trust for his alleged role in the case.
The court has yet to announce its verdicts against Cui Yung, another ex-chairman of the FAT and Chen Shang-chun, the company's former president, as they were placed on a wanted list soon after being released on bail after prosecutors recommended a jail term of 18 years and 14 years, respectively, in 2008.
In 2008 prosecutors accused Hu, Cui, Chen and other related officials of the FAT of embezzling NT$600 million in cash assets from the FAT within 10 years starting in 1997, when they set up an investment consulting company by utilizing the firm's capital fund. Then, the three allegedly converted the investment consulting company into their privately held firm to carry out FAT's re-investment projects, thus eventually transferring FAT funds into their personal pockets. Prosecutors claim this forced heavy losses on the firm and prompted the airline to suspend its flight operations as a result.
Based on the court's findings, it was found that Cui Yung, after succeeding Hu as chairman of the FAT, directly instructed Chen Shang-chun, then president of the company, to carry out the embezzlement scheme in the form of re-investment cases.
The court found that Benny Hu, who was then also president of China Development Industrial Bank, didn't get involved in the FAT's alleged re-investment cases. The court also found no evidence suggesting Hu had ownership of the abovementioned investment consulting firm and the resultant income of stock dividends from the consulting company.
Accordingly, the court acquitted Hu of participating in the embezzlement scandal.
Meanwhile, the court ruled to have Wu Yung-wei, FAT's former vice president in charge of financial affairs, face a jail term of seven years for violating the Securities Trading Act and the Accounting Act in connection with the NT$600 million embezzlement scandal.
In addition, Lou Wen-hao, a managing director of Angkor Airways Corp., was also sentenced to six years and six months in jail for the firm's failure to honor a due payment of NT$800 million to the FAT for chartered flights consigned by Angkor Airways.
In response to the rulings issued by the Taipei District Court, a spokesman for the FAT said that the FAT has been restructured and its current management team has nothing to do with the firm's previous management, adding that the FAT hopes to maintain smooth operations in the future.