TAIPEI - A Taiwan court on Friday indicted a Singaporean man for forgery and lying in a high-profile case involving the alleged embezzlement of 30 million US dollars in diplomatic funds.

Wu Shih-tsai was charged with forging bank records to cover his tracks and making up a story that gunmen threatened his life, said Fred Lin, spokesman for the Taipei district prosecutor's office.

He was detained after the claims came to light in May, when Singapore's High Court approved Taiwan's request to freeze a joint bank account belonging to Wu and another businessman, Ching Chi-ju.

Taiwanese authorities suspect both men of stealing funds intended to help the island forge ties with Papua New Guinea in 2006.

Wu has denied the charges, saying the money was in Ching's account before it vanished. Authorities have also issued an arrest warrant for Ching, who has Taiwan and US dual nationality and reportedly fled to the States.

Prosecutors said they will continue to investigate the alleged involvement of three former top officials in the government of then President Chen Shui-bian.

Vice-Premier Chiou I-jen, Foreign Minister James Huang and Vice-Defence Minister Ko Chen-heng resigned in May to take responsibility for the scandal, just days before Chen left office.

All three have denied any wrongdoing, although Chiou admitted introducing one of the two suspected embezzlers to Huang.

Diplomatic recognition is a hot issue in Taiwan, which is formally recognised by only 23 countries. China considers the island as part of its territory.

Taipei lost its UN seat to Beijing in 1971, and both sides were accused of using generous financial packages to woo allies away from each other.

- AFP/ir