Taiwan Reduces Claim Against Thales in ’91 Frigate Sale Scandal
By PIERRE TRAN, PARIS
Taiwan has cut to $882 million from $1.12 billion its claim against military systems company Thales in a dispute over the 1991 sale of six frigates, documents filed with the French market regulator show.
The Republic of China Navy reduced its claim in April to the $882 million figure after demanding $1.12 billion in June 2005, Thales said in an update filed on Dec. 15 to the Authorité des Marches Financiers, the market watchdog. The update was made to its reference document submitted on April 12.
Taiwan’s claim is based on allegations that Thales, then known as Thomson-CSF, wrongfully paid commissions to agents in the sale of the frigates.
Thales said in the filing that it and its industrial partner have consistently contested the claim.
A Thales spokesman declined to comment beyond the information contained in the updated filing.
Thales was prime contractor on the sale of the frigates, which were built by French naval company DCN.
If Taiwan won the case, Thales would be liable for 30 percent of the claim, the filing said.
Thales made provisions for the dispute in its 2005 accounts and maintained the level of provisions in the accounts for the first half of 2006, the filing said. The Thales spokesman declined to say what the level of provisions was.
French judges have been investigating corruption allegations arising from the Taiwan contract over a number of years but have made no arrests, notably because documents are protected by defense secrecy laws, which the government refuses to lift.
One French analyst believes some of the alleged commissions paid to Taiwan officials in the frigate sale came back to France and were used as political party campaign funds for the 1995 national elections.