TAIPEI - A LEADING Taiwanese financial company on Thursday denied accusations that it gave former president Chen Shui-bian millions of dollars in bribes to ensure the acquisition of a bank when he was in office.

Cathay Financial Holding Co. said in a statement published in major newspapers that it bought United World Chinese Commercial Bank in 2002 in a 'legal and open' process.

'The case was not part of the former government's financial reforms and there was no reason to give the Chen family 500 million Taiwan dollars (S$23.17 million) in exchange,' it said.

'The TV commentators did not provide any proof for the allegations and this showed that their remarks were fabricated,' it said.

The statement came after lawmaker Chiu Yi of the governing Kuomintang (KMT) claimed on television this week that the company offered Chen the money in return for ensuring that the deal went through.

Mr Chiu also alleged that the money has been stashed in a vault in Cathay United Bank which also contained another 500 million Taiwan dollars given by two other firms.

Taiwanese authorities in August started investigating financial reforms during Chen's term, particularly controversial acquisitions in the banking sector.

Chen's wife Wu Shu-chen has been accused of taking bribes to meddle in the reforms - charges she has flatly rejected.

The ex-leader is being investigated for allegedly embezzling government funds, laundering money, taking bribes and document forgery in a string of scandals that also implicate his family and top officials in his administration.

Chen, locked up since last month, can be held for four months before prosecutors have to charge him.

Chen, whose pro-independence stance while in office had angered Beijing, has repeatedly accused the China-friendly KMT of being behind the corruption allegations against him. -- AFP