Taiwan executive indicted in 'gutter oil' scandal

TAIPEI - The head of a Taiwanese company at the centre of a food safety scandal was charged with fraud for selling hundreds of tonnes of "gutter oil", causing mass product recalls, prosecutors said Friday.

Yeh Wen-hsiang, chairman of Chang Guann Co, was indicted on 235 counts of fraud and food safety violations for selling the recycled cooking oil to food companies, bakeries and restaurants since March, the Pingtung district prosecutor's office said.

Three people, including the manager of an unlicensed factory that supplied the firm, were indicted for the same offences while four others were charged with violating waste disposal law, it said in a statement.

Prosecutors asked the court to hand down heavy sentences as the accused had shown no remorse and their actions not only caused a food safety crisis but had hurt Taiwan's international image, the statement said.

Fraud and food safety violations are punishable by maximum seven-year and five-year jail terms respectively, according to Taiwanese law.

Yeh has been detained since September 13 after investigators discovered his company had purchased 243 tonnes of tainted oil collected from cookers, fryers, and grease traps, as well as recycled grease from leather processing plants.

The contaminated fat was then mixed with regular lard before distribution to clients.

Hundreds of tonnes of cakes, bread, instant noodles, cookies, steamed buns and dumplings were removed from shelves in Taiwan and Hong Kong when the case surfaced last month, authorities said.

More than 1,000 restaurants, bakeries and food plants in Taiwan had used the tainted oil, according to the Food and Drug Administration.

Taiwan's government is planning to increase fines tenfold for food safety violations and raise the maximum prison term to seven years, as well as offering whistle-blowers more rewards in the wake of the case -- the second food safety scandal to hit the island in less than a year.

Last December a Taiwanese factory owner was sentenced to 16 years in prison for selling olive oil adulterated with cheap cottonseed oil and a banned colouring agent, following a mass recall.