Ex-CAA chief backs out of TransAsia deal
By Sun Hsin Hsuan, The China Post Thursday, December 1, 2016, 12:02 am TWN
TAIPEI, Taiwan -- An investment team fronted by former Civil Aeronautics Administration (CAA) Director-General Chang Kuo-cheng (張國政) has pulled out of a potential takeover of TransAsia Airways, after the government revoked the airline's flying rights Wednesday.
The decision comes only a day after Chang announced the bid to take over TransAsia. He said the purchase was being bankrolled by an anonymous IT entrepreneur.
While bringing another twist to the saga of the troubled airline's demise, the investment group's withdrawal is not entirely surprising as Chang had said Tuesday that the bid was contingent on the government maintaining TransAsia's flying rights.
Chang confirmed the revocation of flying rights had driven the group's decision to drop its pursuit of TransAsia, saying, "There is no point in acquiring an airline without aviation rights."
Chang went on to accuse current CAA Director-General Lin Kuo-shian (林國顯) and Transportation and Communications Ministry Deputy Minister Wang Kwo-tsai (王國材) of "not understanding the aviation industry."
But Wang hit back Wednesday, calling Chang's fleeting rescue bid "a farce."
The CAA received a two-page report from TransAsia Airways on Tuesday evening — the deadline by which the airline was required to present comprehensive plans to resume operations in order to retain its flying rights. Wang said the report "contained only plans on company dissolution and severance packages."
"Without plans to resume operations, the CAA must proceed to retract its (TransAsia's) flying rights," Wang said.
Transportation and Communications Minister Ho Chen Tan (賀陳旦) said, "Even though (TransAsia Airways') aviation rights have been revoked, its operating license is still effective. Therefore, its future buyer — if any — can still participate in an aviation rights rearrangement."
Adding to the sense of chaos engulfing the aviation industry, EVA Air's former spokesman Nieh Kuo-wei (聶國維) confirmed Wednesday that the airline's former Chairman Chang Kuo-wei (張國煒), who was ousted by his half sibling this March, plans to launch a new airline, slated to operate under the name Star Airways (星宇航空).
Chang Kuo-wei was widely tipped as a potential buyer of TransAsia Airways before the announcement.
Suspicions of Market Manipulation
TransAsia Airways' stocks surged 8 percent to NT$3.7 on Tuesday, ending the fifth consecutive day of closing at limit-down price, with more than 56,000 purchases made.
It stumped again and closed at limit-down price at NT$3.39 on Wednesday, after Chang announced that his team had withdrawn from the potential acquisition deal.
However, the stock's rapid increase in value following Chang's announcement aroused suspicions that the bid was intended to manipulate prices.
Taiwan Stock Exchange (TWSE) Chairman Shih Jun-ji (施俊吉) said the TWSE had submitted trading records to prosecutors.
Chang may have violated Article 155 of the Securities and Exchange Act, Shih said, and could receive a sentence of between three and 10 years in prison, plus an NT$30 million to NT$100 million fine.
MOST POPULAR OF THIS SECTION