Wu Huh-sheng, a company manager, rejected the allegation, saying TransAsia received no reports of "faulty engines".
So far no cause has been given for the crash, which was captured in dramatic footage from a dashboard camera. Civil aviation officials said the flight took off at 10.53am local time and lost contact with controllers two minutes later.
However, in their final message to air traffic controllers, the pilots suggested the plane had had catastrophic engine failure.
"Mayday! Mayday! Engine Flame-out!" one pilot says. A flame-out is where an engine loses power, with possible causes ranging from a bird strike to fuel starvation.
The ATR-72-600 prop-jet aircraft crashed shortly after take-off en route to the outlying Taiwan-controlled Kinmen islands. There were 53 passengers, including two children and 31 mainland Chinese citizens, and five crew on board.
The claims emerged as the death toll from the disaster rose. Eleven people are still missing while 15 survived.
Taiwanese aviation officials say the plane had been in service since April last year and had undergone a routine safety check last month.
Meanwhile, a couple and their toddler who survived the crash changed seats just before the plane took off - a move which may have saved their lives.
The plane came to rest upside-down in a river. An emergency exit was above the water line, allowing some passengers to escape as rescuers arrived on the scene.
The survivors included three members of the Lin family, including a 2-year-old boy who was found floating in the water "with [his] face turning pale and lips turning purple", according to United Daily.
He was pulled from the water by his father and was saved by being resuscitated.
The newspaper said the father had asked to switch from the left to the right side because he was concerned about a noise coming from the left wing. In the crash, the left wing clipped the highway and the plane cartwheeled into the river.
Footage captured on a dashboard camera suggested that the pilots may have been trying to avoid striking an apartment block just before the crash.
The captain, Liao, 42, and the first officer, Liu Zizhong, 45, both died in the crash.