A court in southern Germany imposed prison terms Tuesday on two former managers of German arms manufacturer Thyssen-Henschel, convicting them of embezzlement and tax evasion in connection with a 1991 delivery of military vehicles to Saudi Arabia.

The Augsburg state court found that the two former managers, Juergen Massmann and Winfried Haastert, took a total of 12.5 million marks (dlrs 6.4 million at current rates) in bribes related to the delivery, money which they failed to declare to tax authorities.

Massmann, a former head of defense technology at Thyssen-Henschel, was given a five-year sentence, while Haastert was sentenced to two years and four months. Their defense lawyers said they would appeal.

The court described the two as accomplices of German-Canadian businessman Karlheinz Schreiber, a key figure in the party financing scandal that tainted former Chancellor Helmut Kohl and his conservative party.

Presiding judge Maximilian Hofmeister said the two managers constructed "a gigantic tissue of lies" to conceal the payments from accounts run by Schreiber.

Schreiber originally was due to stand trial in Augsburg, where court proceedings started last November. However, the arms lobbyist, who was arrested in Toronto in 1999 at the request of German officials for alleged tax evasion, is still fighting extradition from Canada.

Prosecutors accused Schreiber and the two former Thyssen officials of creaming off undeclared commissions totaling 24.4 million marks (dlrs 12.6 million) from the deal to deliver the Fuchs armored vehicles, which were equipped to detect biological and chemical warfare agents.

Schreiber also is accused of paying 3.8 million marks (dlrs 1.96 million) to Holger Pfahls, then a top official in the German defense ministry, to ensure that 36 Fuchs vehicles were passed from the German army to Saudi Arabia after Thyssen failed to deliver new units to the Saudi forces on time during the Gulf War.

The court decided last year not to pursue charges against the former treasurer of Kohl's Christian Democrats, Walther Leisler Kiep, for abetting tax evasion. Pfahls was not charged to stand trial as the court had no address for the former official, who is believed to be somewhere in Asia.

Allegations that Schreiber gave a cash donation to Kiep in 1991 triggered a scandal that deepened with Kohl's 1999 admission that he had personally accepted off-the-books donations from supporters.

With acknowledgement to Sapa.