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TAIWAN READY TO FILE SUIT FOR RETURN OF LAFAYETTE SLUSH FUND

ROC Central News Agency

2006-02-26 18:11:54

    Taipei, Feb. 26 (CNA) The government is ready to file a lawsuit for the return of a huge slush fund frozen in Swiss banks that is believed to be made up of illegal kickbacks from a Taiwan arms procurement deal with France back in the early 1990s, judicial authorities said Sunday.

    Outgoing State Public Prosecutor-General Wu Ying-chao told CNA that a special prosecutorial panel investigating the high-profile kickback scandal involving Taiwan's purchase of six Lafayette-class frigates from France in 1991 has authored a 70-page report on the kickback refund lawsuit. "The report clearly lists the individuals to be asked to refund, the amount of kickbacks each of them has to refund and the offenses each has committed, as well as other related matters," Wu said.

    According to Wu, Andrew Wang, the agent in Taiwan for Thomson-CSF, the French company that sold the frigates to Taiwan, is not the only target to be asked to refund the illegal kickbacks. Nevertheless, he would not reveal the identity of any other defendant nor the amount of the refunds sought. "The special panel is still putting the final touches on the paperwork," Wu said.

    A spokesman for the special investigation panel said that as the refund suit must follow Switzerland's civil suit procedures, the report was sent last month to Swiss lawyers retained by Taiwan to handle the lawsuit. "The Swiss lawyers have suggested that we prepare some additional information and data. We have thus added seven more pages to the report and are studying follow-up procedural issues with the Swiss lawyers, " the spokesman said, adding that a French formal lawsuit will be filed with the Swiss Judicial Department later this year.

    Under a bilateral judicial aid agreement, the Swiss government handed over to Taiwan a collection of bank files suspected of links to the Lafayette kickback scandal last November. "After poring over the six cases of files brought back from Switzerland, we discovered that each time our government made a payment installment for the frigates, a sum roughly equivalent to 18 percent of the payment would 'coincidently' be remitted into bank accounts owned by Wang or members of his family, "the spokesman said." We suspect that the remittances were illegal kickbacks."

    The Swiss files show that frozen deposits in the Wang family's bank accounts top 900 million Swiss francs (about NT$23 billion). Even after the family's legal assets are deducted, the amount that Taiwan intends to reclaim would still be astronomical.

    It might take three to five years to conclude the lawsuit, the spokesman said, adding that Taiwan might still seek judicial aid from several other relevant countries, including France and Luxembourg, to back its request for Switzerland to return the money.

    Moreover, the spokesman said, the lawsuit will be very expensive. According to a preliminary estimate, the cost of retaining foreign lawyers alone could exceed NT$100 million. "The Ministry of Justice must appropriate budget for the lawsuit," he added.

    The files brought back from Switzerland include 46 bank accounts under the names of Wang, his three sons and Wang's company, all of whose accounts have been frozen by the Swiss Federal Court. Wang is the key suspect in the scandal.

    The files, which are written in English, French and German, also include a number of previously hidden overseas bank accounts related to the US$2.8 billion Lafayette deal, as well as information about relevant capital flows in Switzerland, judicial authorities said, adding that the Swiss court files clearly document deposit times and destinations of the capital.

    Wang fled Taiwan following the death of naval Capt. Yin Ching-feng, who is widely believed to have been murdered in late 1993 when he was about to blow the whistle on colleagues who were allegedly taking kickbacks from the deal.

    Wang has been charged in absentia with murder, corruption, money laundering and fraud.

(By Sofia Wu)

ENDITEM/J