UNITED24 - Make a charitable donation in support of Ukraine!

Weapons of Mass Destruction (WMD)

Taiwan seeks recovery of frozen funds from frigate scandal

ROC Central News Agency

2013/12/17 20:55:47

Taipei, Dec. 17 (CNA) Taiwan is seeking to reclaim US$340 million from Swiss accounts belonging to former Taiwanese Navy Captain Kuo Li-heng and arms broker Andrew Wang, the men behind a corruption scandal linked to the 1991 procurement of Lafayette-class frigates from France, Taiwanese investigation authorities said Tuesday.

Special Investigation Division spokesman Chang Chin-feng declined, however, to reveal more details as 'mutual judicial assistance' is still ongoing.

Taiwan's High Court earlier this year found that Kuo was an accomplice in the bribery scandal, opening the door for Taiwan to reclaim the US$340 million.

Swiss authorities have frozen about US$700 million in bank accounts belonging to Wang and Kuo since 2001 at the request of Taiwanese judicial authorities. They have agreed to send the funds to Taiwan once a final verdict in the case has been made.

A source familiar with the court case said that a ruling by the High Court to retrieve the funds has been appealed to the Supreme Court, but Taiwan will still deliver the High Court's decision to Switzerland through judicial channels.

The Special Investigation Division estimates that 60 percent of the frozen money was intended as kickbacks in the frigate deal, while 40 percent was meant for deal to buy Mirage fighter jets.

The corruption and bribery case stems from a 1991 deal for Taiwan's Navy to buy six Lafayette-class frigates from French company Thomson-CSF, now renamed Thales S.A., for a high price tag of US$2.8 billion. The price included procurement kickbacks and bribes to facilitate the purchase.

The Taiwan High Court earlier this year sentenced Kuo to 15 years in prison for accepting US$17.6 million in kickbacks from Wang relating to the 1991 Lafayette-class frigate deal.

Kuo had been originally sentenced to life in prison for giving sensitive military information to Yang Peng, an agent from an unidentified German firm, in exchange for kickbacks in 1993 to help assure that the company won a contract from Taiwan's government for minehunters.

Kuo was released from Taipei Prison earlier this month after serving a commuted sentence of nearly 20 years behind bars for his part in the scandal.

His role in the Lafayette scandal implicated him in the death of Navy Captain Yin Ching-feng, who was found dead at sea in December 1993. Yin was allegedly killed for planning to blow the whistle after discovering the inflated price tag for the six frigates.

Wang, the main figure in the bribery scandal and Yin's suspected killer, fled the country following the death of the former naval captain.

(By Liu Shih-yi and Y.L. Kao)

Join the GlobalSecurity.org mailing list