Ex-FAT chairman indicted over NT$3 billion loan fraud case

Taipei, June 5 (CNA) Former Far Eastern Air Transport Corp. (FAT) Chairman Chang Kang-wei (張綱維), who is currently serving a prison sentence in a separate case involving the now-defunct airline, was indicted Friday on charges of fraudulently obtaining more than NT$3 billion (US$100 million) in bank loans.

According to prosecutors, Chang, the de facto head of the Huafu Group, faced funding shortages after investing in land development projects in Tamsui, New Taipei, beginning in 2009.

Chang allegedly inflated the value of 15 land parcels owned by Huafu and arranged a sham sale of the properties to Hefengtai Co., another company under his control, as part of a scheme to secure a larger bank loan in the company's name in 2013.

Based on the fabricated transaction, in which Hefengtai claimed it had purchased the land for a real estate development project, Taiwan Business Bank approved a NT$3.5 billion loan, of which more than NT$3 billion was disbursed. Prosecutors said NT$450 million was later transferred to Chang's personal account.

The development project was subsequently left unfinished and failed to generate sufficient cash flow to service the debt, prompting the bank to write off the more than NT$3 billion loan as a bad debt in 2021.

The indictment is separate from an earlier case involving FAT, in which Chang was accused of embezzling company funds and using the airline's resources to support other businesses within Huafu.

In that case, the Taipei District Court sentenced Chang in September 2024 to 14 years in prison and ordered the confiscation of about NT$3 billion in illegal gains.

The Taiwan High Court later upheld a combined 14-year prison sentence. Part of the ruling, involving violations of the Civil Aviation Act, became final and Chang was sent to prison last year.

FAT ceased operations in late 2019 and later had its air operator certificate revoked.