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Page last updated at 23:45 GMT, Monday, 3 May 2010 00:45 UK

Thales and France fined $830m for Taiwan navy deal

Taiwanese navy Lafayette frigates (26 January 2010)
Frence's government played a crucial role in negotiating the deal with Taiwan

An international court has ordered France and defence electronics group Thales to pay $830m in compensation to Taiwan over a sale of warships in 1991.

The panel of arbitrators ordered the payments to make up for unauthorised commissions paid to help Thomson-CSF, which became Thales, win the deal.

The contract for the six navy frigates forbade commissions to intermediaries.

Thales said its share of the fine was about 27% or $230m, but says that it will appeal against the ruling.

The company, which is part-owned by the French state, said it disputed "the very grounds of this decision" by the International Chamber of Commerce's International Court of Arbitration.

It had been responsible for 27% of the value of the contract, while the French state had been responsible for the remainder.

The French ministry of defence declined to comment.

Yin Ching-feng
The suspicious death of a Taiwanese navy captain triggered an investigation

In the deal, in which the French government played a crucial role, Taiwan's navy bought six Lafayette frigates from Thomson-CSF and the state-owned shipbuilder DCN for $460m each, nearly double the original budget.

The suspicious death of the head of procurement for the Taiwanese navy, Captain Yin Ching-feng, who was found floating off the coast of Taiwan in 1993, eventually triggered a corruption investigation. Six former naval officers, including a vice-admiral, were later indicted in connection.

In 2001, the Taiwanese authorities filed a complaint alleging that the anti-corruption clauses in the contract had been breached.

French prosecutors investigated claims that bribes were paid in the deal, but they were unable to ascertain who might have benefited.



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