KUALA LUMPUR, Jan 6, 2010 (AFP) - A Malaysian air force sergeant and a businessman were charged Wednesday over the theft of two US-made fighter jet engines worth US$29 million dollars stolen from a Malaysian military airbase.

Tharmendran Nagarajah, a 42-year-old sergeant, faces 10 years in jail for abetting the theft of the engines while 37-year-old aviation scrap parts dealer Rajendra Prasad faces seven years for allegedly disposing of the equipment.

"Two people were charged today. One with abettment and one for disposing of the two jet engines. The engines have not been recovered," said government prosecutor Raja Rozela Raja Toran.

Raja Rozela said she had "no more instructions" on whether other figures were to be charged over the scandal, which has triggered allegations of official corruption.

The two Northrop F-5E jet engines were reportedly sold on the black market by military officers to a South American company after being taken from a military airbase, apparently last year.

Police traced the engines to Argentina, but reports later said they were then shipped to Uruguay. Investigating officer Wan Zainulddin said outside the court that police had travelled to Uruguay to search for the missing equipment.

The accused pair both pleaded not guilty. Tharmendran's lawyer said that the sergeant worked in a different air force base to the one where the engines were stolen from.

"Who is responsible for moving the engines? Why should my client plead guilty? He was in no way responsible for the theft," lawyer V. Ravichandran told AFP at the Petaling Jaya Sessions Court outside the capital.

He said that Tharmendran's only involvement in the case had been to respond to a query from a friend of Rajendra who wanted to know if there were any second-hand engines for sale.

Armed forces chief Azizan Ariffin has said the theft was only the "tip of the iceberg" after a newly completed audit revealed equipment worth millions of ringgit was missing including other jet fighter parts.

A number of countries subject to US arms embargoes, including Iran, Sudan and Venezuela, have F-5 fighters that use the antiquated engines. The jet first flew in 1963 and Northrop ended production in 1989.