Jet fighter bid in jeopardy after arrests of two Korean colonels

SEOUL French aerospace giant Dassault Aviation has denied allegations that it used bribes in its bid to win a multibillion-dollar South Korean project to buy new fighter jets.

"Dassault has never bribed anyone, nor ordered anyone in South Korea to do so," said Yves Robins, Dassault's vice-president for international relations, said at a news conference.

A South Korean air force colonel was arrested last week on charges of receiving $8400 from Dassault's local agent, Comet International Co.

A second air force colonel was arrested on Wednesday on suspicion of leaking classified documents related to the project to Comet. No charges were filed against him.

Military investigators said the two colonels worked in the same air force office handling the fighter jet project. Comet's top management reportedly includes several retired air force officers.

"We don't know whether Comet gave money or not. It will be found out in Korean court," said Robins.

Dassault's Rafale is vying with US Boeing's F-15K, Russian Sukhoi's Su-35 and European consortium Eurofighter's Typhoon for a $3,2bn contract to supply 40 new fighter jets by 2008.

South Korea's defence ministry plans to announce the winner in early April.

Under the terms of the bidding, a competitor can be disqualified if it, or its agent, is convicted of bribery in connection with the bidding. A successful bidder can lose its contract.

Robins said that Dassault did not intend to withdraw its bid for the project, because it believed it "has not done anything wrong". Robins said Dassault's business contract with Comet would continue, but he said that Comet was asked to stop lobbying and other activities for Dassault for the time being because of the troubled climate.

"This does not mean that we admit any wrongdoing," said Robins.

The colonel who was arrested last week was identified as Cho Joohyong. Cho claimed that top defence ministry officials pressured his office to alter evaluation methods to favour Boeing.

But the defence ministry denied the claim.

South Korea has bought most of its weapons from the US. Interoperability with the US military was one of the most important factors that swayed South Korea's past weapons procurement.

About 37000 US troops are stationed in South Korea as a deterrent against communist North Korea.