France faces fine over frigate sale: judicial report
PARIS (AFP) Jan 28, 2004
France could be made to pay 600 million dollars in fines to the government of Taiwan because of illegal commissions that massively inflated the price of warships sold to Taipei in 1991, according to an official report leaked on Wednesday.
The report drawn up by Paris prosecutor Yves Bot and handed over to the justice ministry on January 15 warned that France is financially liable because of a clause in the contract that stipulated that if commissions were found to have been paid the amount should be deducted from the sale price, officials said.
Taipei paid more than 16 billion francs (2.44 billion euros) for the six La Fayette class frigates, and judicial investigations have since revealed that around a third of that was spent on a complex lobbying operation to secure the deal by the then state-owned French defense-electronics giant Thomson.
Thomson — now the privatised Thales — and the Taiwanese government have resorted to an international commercial tribunal to settle the dispute.
The controversial frigates sale was “easily the biggest politico-financial scandal of the last ten years” in France, according to a recent investigation into the case by former judge and European parliamentarian Thierry Jean-Pierre.
In his book “Taiwan Connection — Scandals and Murders at the Heart of the Republic,” he warned that France would have to pay the 600 million dollars twice over — once in the form of the commissions to middlemen and a second time in fines to Taiwan.
In his advice to the justice ministry, Bot said that Thales could not be made to pay the fine, because though as Thomson it led the negotiations for the contract, it was covered by guarantees provided by the state via its Naval Construction Directorate (DCN) which actually built the ships.
“As far as we understand the matter, the guarantees … will mean that the public authorities must take on the whole of the financial charges which the arbitration tribunal will hand down,” the report said.
By: hallo84 - 1st February 2005 at 22:56
And Li Deng Hui needed a healthly bank account overseas at the time. He was actively trying to get China to attack.
Funny thing was that 50% of the “rebate” actually went to the PRC???
i wonder why???
By: GoldenDragon - 1st February 2005 at 22:18
The biggest set back in the investigation was the then Taiwanese President Li Deng Hui who took the blunt of the money. He actuall has a swiss bank account with a huge unexplained balance. Due to national pride and elections politics he was never convicted thought all facts was pointed his way.
And Li Deng Hui needed a healthly bank account overseas at the time. He was actively trying to get China to attack.
By: hallo84 - 1st February 2005 at 20:32
The biggest set back in the investigation was the then Taiwanese President Li Deng Hui who took the blunt of the money. He actuall has a swiss bank account with a huge unexplained balance. Due to national pride and elections politics he was never convicted thought all facts was pointed his way.
By: Distiller - 1st February 2005 at 19:16
Called the “Lafayette Scandal” or the “Elf-Scandal”. Madame Christine Deviers-Joncour wrote a book about it “La putain de la république”. She was about the only one who was convicted back then.
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February 1, 2005 at 6:12 pm