Defence bidder on spy charge
Correspondents in Seoul
March 22, 2006
A TOP executive of the French company seeking control of Australia’s leading defence manufacturer has been arrested for espionage in South Korea.
A senior executive working for the military and aerospace giant Thales in South Korea was arrested yesterday in the central city of Daejeon for obtaining South Korean military secrets.
The French businessman, who was not named by prosecutors, and two South Koreans were held for obtaining confidential documents concerning radar equipment for the South Korean navy.
The Australian push by Thales, which is 30 per cent owned by the French Government, to take full control of leading defence contractor ADI could raise security concerns with the US.
The Daejeon prosecutors’ office refused to identify the Frenchman. He was described as an executive with the South Korean branch of Thales.
“Three people were arrested and charged with obtaining military secrets, including a Frenchman,” a prosecution official said yesterday.
The Frenchman was accused of obtaining classified information from a researcher at South Korea’s Agency for Defence Development, the government-run research organisation. ADD is responsible for developing a radar system for South Korea’s new generation of warships.
The information was allegedly obtained by the Frenchman through a Korean consultant who was a former ADD official.
The prosecutors’ office said the consultant and researcher were arrested for leaking confidential documents.
Thales said in a statement it regretted the decision by South Korean prosecutors to arrest their employee.
“Thales is surprised by and regrets the decision,” the firm said in a statement.
“Thales believes it has fully complied with all relevant Korean regulatory procedures. We have been fully co-operating with the investigation.
“Thales believes a positive outcome to this incident will be reached and that its good faith will be recognised in this case. The group will continue to co-operate as the investigation moves forward.”
South Korea’s navy is planning to develop a new radar system for the nation’s new generation of warships.
Foreign military suppliers such as Thales were expected to be involved in bidding for lucrative contracts to supply parts and related equipment.
The statement from Thales said the French company had invested heavily in South Korea and maintained “the very best of relations with its Korean military customers”.
In Australia, Thales lodged an application on March 3 with the Foreign Investment Review Board to buy from Australian joint venture partner Transfield the 50per cent stake in ADI it does not already own.
The planned ADI acquisition would give Thales 3500 staff in Australia and bring it ADI projects, including the $1billion upgrade of the navy’s FFG frigates and the Bushmaster armoured vehicles being supplied to the army.
However, giving full control to a French company of an Australian company handling sensitive military technology, particularly from the US, may cause diplomatic ripples.
A similar proposal five years ago was scuttled by security concerns, and US worries about deals with France – a strong opponent of recent US military campaigns, particularly the war in Iraq – could be an issue.
AFP
http://www.theaustralian.news.com.au/common/story_page/0,5744,18558112%255E31477,00.html
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March 21, 2006 at 9:01 pm