'We will look into the allegation brought against Lee,' prosecutors' spokesman Chen Yun-nan told reporters.

When asked if Chen was the accuser, the prosecutor replied 'yes'. Mr Chen has alleged on television that his predecessor transferred around NT$1 billion (S$43.3 million) abroad through dummy accounts - charges Mr Lee angrily rejected.

Mr Lee, who served as president between 1988-2000, was expelled by the Kuomintang for campaigning for a hardline pro-independence party several years ago.

He was branded a 'splittist' by China for seeking a separate identity for Taiwan during his tenure. Beijing fired missiles near the island in 1995 and 1996, prompting the United States to send in patrolling warships.

China still sees Taiwan as part of its territory to be reunified, by force if necessary, after their split in 1949 at the end of a civil war. -- AFP