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December, 8, 2016

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Ex-CAA chief, airline head questioned

TAIPEI, Taiwan -- Former Civil Aeronautics Administration (CAA) chief Chang Kuo-cheng (張國政) and TransAsia Chairman Vincent Lin (林明昇) were subpoenaed Thursday as part of a probe into a takeover offer for TransAsia Airways (復興航空).

Chang and Lin were called as witnesses by the Taipei District Prosecutors Office (台北地檢署).

Chang said yesterday that it wasn't he who had wanted to announce an offer on Tuesday to take over the troubled airline.

Instead, it was Lin who suggested that it would be best to follow the proper procedures and make everything public, Chang said.

The offer — which Chang made Tuesday on behalf of backers he would not identify — was aborted the next day and decried by the government for being "premature" and showing "a lack of discretion."

Commenting on the decision to announce the offer, Chang said, "I called the transportation minister and told him that I'm taking over (TransAsia)."

Chang said he was told by a secretary that the Transportation Ministry was in no position to tell him whether to attempt to take over the airline, but that he should speak with Lin, TransAsia's chairman.

"Lin told me, 'Whether you take over the airline doesn't matter, because I'm going to dissolve anyway,' but 'according to procedure, it's best to make it public,'" Chang said.

Shortly after Chang announced that he was "willing to take over the airline," TransAsia stocks surged 8 percent to NT$3.7 on Tuesday, ending five consecutive days of trading that closed at the limit-down price.

But shares slumped back to the limit-down price on Wednesday after Chang withdrew his offer, saying it was because the CAA retracted TransAsia's aviation rights.

Suspicions surfaced over whether Chang's potential takeover announcement was made with the intention of manipulating the market.

Taiwan Stock Exchange Chairman Shih Jun-ji (施俊吉) said Wednesday that the exchange had submitted trading records to prosecutors.

Shih said Chang may have violated Article 155 of the Securities and Exchange Act, and could receive a sentence of between three to 10 years in prison, plus an NT$30 million to NT$100 million fine.

'Serious about taking over'

Chang told press after interrogations that he "hadn't thought about stock prices from beginning to end."

"All meeting minutes and documents regarding why I wanted to take over (TransAsia), how to operate and information on personnel have been handed to prosecutors," Chang said.

"I was serious about taking over the airline."

Chang refuted rumors that he had consulted for a venture capital group that was one of the top 10 shareholders of TransAsia and had sold 50,000 stocks in the company over the past couple of days.

"Go prove the rumors yourselves and ask prosecutors to verify them too," Chang charged. "What didn't happen didn't happen."

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