TAIPEI (AFP) - Taiwanese prosecutors said Tuesday they will pursue the family of man accused of reaping hundreds of millions of dollars from a controversial French arms deal over two decades ago, even after he died this year.

Andrew Wang was indicted for corruption in 2006 over his involvement in a slush fund linked to a US$2.8 billion (S$3.71 billion) contract for Taiwan to buy six Lafayette-class warships in 1991.

Wang was put on Taiwan's most wanted list after he and his family fled the island shortly before the scandal broke in 1993. He died from an illness in London in January at the age of 87, Taiwanese officials said.

"We will drop charges against Wang since he had passed away. However, we will continue to seek the return of the ill-gotten funds in Wang's case from Switzerland," said Kuo Wen-dong, a spokesman for the special investigation unit under the supreme prosecutor's office.

The funds are in various bank accounts in the name of Wang's wife and children, who were also indicted in the case, and have been frozen by Swiss authorities pending the legal preceeding in Taiwan, Kuo said.

Taiwan's supreme court found that Wang solicited and received around US$340 million in kickbacks from French defence company Thomson-CSF (now Thales) over the frigate deal.

His accomplice, former navy captain Kuo Li-heng, served a 20-year prison sentence for accepting bribes to facilitate the deal.

Allegations of backhanders emerged after the body of the officer who ran the Taiwanese navy's weapons acquisitions office was found floating in the sea off the island's east coast in 1993.

Investigators believed Yin Ching-feng was murdered because he was ready to blow the whistle on rampant corruption in the military - including the Lafayette deal.

A French judicial probe opened in 2001 to investigate claims that much of the money paid by Taiwan went on commissions to local middlemen, politicians and military officers, as well as in China and France.

Taiwan's highest anti-graft body concluded in the same year that as much as US$400 million in bribes may have been paid throughout the course of the deal.

In 2011, Taiwan received US$875 million from Thales, after the company lost an appeal over wrongful payments of commissions on the frigate deal.