One of the six Lafayette-class frigates Taiwan purchased from France is docked at Tsuoying naval base in southern Taiwan. Central News Agency

Huang vows to pursue Lafayette slush funds in 1990s ship scandal

Taiwan's top prosecutor said Tuesday he will continue to pursue kickbacks related to a 1990s frigate deal after an international court made an important ruling on the case.

Prosecutor-General Huang Shih-ming said he will ask Swiss authorities to continue to freeze hundreds of millions of dollars in an alleged slush fund held in Swiss bank accounts by Andrew Wang, who brokered Taiwan's purchase of six Lafayette frigates from France in 1991 for $2.8 billion.

A local task force investigating the Lafayette scandal discovered in March last year that Wang held $700 million in Swiss bank accounts.

The Swiss authorities have frozen the accounts and promised to continue to freeze Wang's funds until Taiwan's judicial system makes a final judgment on whether he is guilty of corruption, Huang said.

Wang, who represented French contractor Thomson-CSF (now Thales) in Taiwan when the frigate deal was struck, has been wanted by Taiwan's authorities since September 2000 in connection with the death of Navy Captain Yin Ching-feng, whose body was found off eastern Taiwan in December 1993.

Yin is widely believed to have been murdered for threatening to reveal the names of those who received kickbacks from the Lafayette deal.

Wang fled Taiwan soon after Yin's death and remains a fugitive abroad.

Huang's statement came after the International Chamber of Commerce's International Court of Arbitration ordered France and Thales to pay a 630 million penalty to Taiwan for violating the contract by paying commissions on the frigate sale.

Taiwan's navy had filed the request for arbitration in 2001.

In response to the ruling, Thales said its share of the compensation is about 27.5 percent of the total, with the French government - which played a major role in the arms deal - responsible for the balance.

The company said it disagreed with "the very grounds of this decision" and that it will file an appeal.

Aside from lingering in international courts, the Lafayette case has also dragged through Taiwan's court system for nearly a decade, and it remains unclear when the cases will be resolved.

Local prosecutors first handed down indictments in the case in July 2001, when they charged six former navy admirals, including former Vice Admiral Lei Hsueh-ming, for corruption.

Other officers, including former Colonel Kuo Li-heng, and Wang and his family were indicted on corruption charges in 2005, and prosecutors recommended Wang be given a life sentence.

Kuo and his brother admitted to taking kickbacks of over $20 million in 2006 and agreed to have the money they hid in Swiss bank accounts returned to Taiwan.

The cases have remained in the court system since then.The Taipei District Court said it would hand down its ruling on the cases involving Lei and the other navy admirals on June 25, but it gave no indication when the cases against Wang and the Kuos would be decided.

China Daily/CNA

(HK Edition 05/05/2010 page4)