Publication: Business Report Date: 2006-03-22 Reporter: Heejin Koo Reporter: Andrea Rothman

South Korea Arrests Local Thales Boss

 

Publication 

Business Report
Date

2006-03-22

Reporter

 Heejin Koo, Andrea Rothman 

Web Link

www.busrep.co.za

 

Toulouse - South Korean prosecutors arrested the head of the local unit of Thales, Europe's largest military electronics maker, and four other people yesterday, on charges of illegally trading military information.

The Daejeon district prosecutor's office charged the French national for obtaining military information from South Korea's Agency for Defence Development, said Kim Hoon, the prosecutor in charge.

Thales vies with US makers Boeing and Raytheon to supply military hardware in South Korea, which is increasing defence spending 12 percent to 23 trillion won (R154 billion) this year.

Kim identified the Thales official only with the initial F.

The French chamber of commerce in Korea lists Bernard Favre d'Echallens as the country manager for Thales International Korea.

Favre d'Echallens could not be reached for comment and all calls to his office were referred to Seoul-based public relations company Edelman.

Christophe Robin, Thales's spokesperson, said the company regretted the court's decision and would co-operate with South Korean authorities. Robin declined to confirm the name of Thales's country manager.

"The company is convinced that it has respected the South Korean regulatory procedures applicable in this year," Thales said in an e-mail. "It will co-operate fully with Korean justice on this matter." Thales had an "active policy of technology transfer to the benefit of Korea".

Its shares fell 0.1 percent to E36.51 (R279.36) as of 11.24am in Paris trading yesterday.

The company has supplied military hardware in South Korea for 30 years. Among its biggest contracts last year was one from South Korea for K-SAM missile systems, worth E219 million.

South Korea has been increasing spending on its military since President Roh Moo Hyun pledged that the nation would be able to defend itself independently within a decade.

Prosecutors also charged two researchers from the Agency for Defence Development, a South Korean military equipment contractor and a broker, Kim said. "The five people were charged under the Military Secrets Protection Act as well as for obtaining military research information."

The Thales official paid 480 million won to the researchers last year in return for information about radar systems, Kim said.

Thales has faced legal challenges elsewhere in relation to its defence contracting.

South Africa's National Prosecuting Authority said it would charge two local units of Thales with corruption when the trial of former deputy president Jacob Zuma started. A judge has already found Zuma's financial adviser, Schabir Shaik, guilty of trying to solicit a bribe for Zuma from Thales in return for protection from a corruption probe.

With acknowledgement to Heejin Koo, Andrea Rothman, Bloomberg and Business Report.