A decision made public Monday in Taiwan that the French government is pulling defence personnel from the island over a court order to pay US$891 million to Taiwan because of a monumental scandal involving the sale of stealth frigates raises as many questions as it answers.

According to Taiwan media reports, the technical team is being pulled out of Taiwan after 15 years and signals a cut-off of direct military contacts between the two counties. It is said to be an expression of pique against the administration of Taiwanese president Ma Ying-jeou.

"One could speculate that the case may offer the French government the opportunity to disengage from Taiwan and deepen its ties with China," said GM Greenwood, a security consultant with Allan and Associates. "The Franco-Taiwan connection is unique as it appears counter to wider French national interests and is not rooted in any legacy issues, such the Taiwan-US relationship.

"An upcoming test of this theory may be clarified at the bi-annual Paris Air Show in June of 2011, which is often used to showcase large defense and civilian aviation deals. Any large deal between China and France could indicate a quid quo pro on the removal of the French military team in Taiwan," Greenwood said.

The decision to leave may also be a demonstration of anger over the fact that Taiwan is also refusing to back away from an investigation into the purchase of Mirage fighter jets in 1993 in which the Air Force paid 50 percent more for the aircraft than the market price at the time. Taiwanese authorities have long believed French arms merchants had been involved in the same kinds of bribery and kickbacks over the purchase of the planes. The same middle-man who was involved in the purchase of the frigates was involved in the purchase of the Mirages.

Taiwan bought 60 of the aircraft from France, along with missiles, at a cost of US$5.2 billion. France has since had to deliver more than US$3 million in compensation for parts and maintenance for the planes, some of which developed engine problems.

Taiwan won a massive US$861 million payment from the defence giant Thales, which is 27 percent owned by the French government, as a sanction for the payments of kickbacks to French, Taiwanese and Chinese officials in the purchase of the Lafayette-class stealth frigates in the 1990s. The Taiwanese Navy filed the case in 2001, alleging it violated Article 18 of the contract, which banned the payment of commissions, which are thinly veiled kickbacks.

An army of French lawyers and magistrates is also pursuing a series of scandals involving Thales, the government-owned contractor DCN and top French politicians. The cases stretch from Taiwan to Malaysia and Pakistan to India and involve kickbacks related to defense contracts to outfit many of the world's navies with frigates and Agosta-class Scorpene submarines manufactured by DCN's subsidiary Armaris.

According to published accounts, the Taiwan case involved allegations of the murders of as many as eight people and reached up to such luminaries as the late French President Francois Mitterand, the former general secretary of Taiwan's ruling Kuomintang Party during its previous tenure in power and the Central Committee of the Communist Party in Beijing.

The accounts say the French state-owned Elf Aquitaine conglomerate paid bribes through Thomson-CSF, which changed its name to Thales in 2000. The money allegedly was to persuade Taiwanese officials to drop a plan to buy cheaper South Korean frigates and for French authorities to approve the sale of more expensive Lafayette-class ones equipped with Thomson-CSF electronic gear. A plan to have the frigates built in Taiwan was also scrapped shortly after the deal was signed, and the work was reassigned to France. An additional amount was allegedly paid to Communist Party officials in China to remain quiescent about the arms sales to Taiwan.

A Taiwanese naval captain named Yin Ching-feng, who is believed to have been ready to blow the whistle on the case in 1993, was found floating in the ocean a few days later after his threat. Thomson-CSF's Taiwan agent Andrew Wang was eventually charged in absentia with the crime. He has long since disappeared. A long string of suspicious deaths followed. Yin's murder became one of Taiwan's most prominent unsolved murders of the 1990s. Wang's bank accounts, frozen in Switzerland, were later found to contain US$900 million.

According to the Taipei-based Liberty Times, the French army officer in charge of the technical team was being recalled to France in July but no replacement had been announced, showing the unit was facing abolition. The team played a key role in organizing visits and exchanges and awarding military export licenses for weapons sales to Taiwan.

Although initially the Taiwan defence ministry said there had been no change in the military arrangements between the two countries, the state-owned Taiwan Radio International, quoting defence ministry sources, appeared to confirm that the French military liaison office is to close.

While other French diplomatic personnel will remain, the removal of the formal French military link will be viewed as at least a signal from Paris regarding its discomfort over the case rather than a coincidence. France and Taiwan had virtually reached an agreement in late April on how to resolve the Lafayette case, according to the story, with Paris to supply new weapons and services as a method of compensation – raising the possibility that French taxpayers would be forced to pick up the bill for commercial corruption.

But Taiwan refused to compromise, the story said, because Ma Ying-Jeou had sought a ruling to prove that his government had not taken part in corrupt activities. The National Security Council said that despite the imminent withdrawal of the French team, a replacement was already being worked on, so the event would not influence future technical and military assistance for the frigates.