TAIPEI - A SINGAPOREAN man was sentenced to two years and four months in jail in Taiwan on Thursday in connection with the alleged embezzlement of US$30 million (S$45 million) in diplomatic funds.

Wu Shih-tsai was convicted of forging bank records to cover his tracks and making false accusations that gunmen had threatened his life when he was first accused of embezzlement, said a spokesman for the Taipei district court.

Wu, a naturalised Singaporean citizen originally from Taiwan, has been in custody since the claims came to light in May.

The Taiwanese authorities suspect both of stealing the cash after it was wired to their joint account by the government.

Wu, who has the right of appeal, has denied the accusation and was jailed, according to the court, after forging bank statements to support his claims that the fund was still in the joint account when in fact it had vanished.

Authorities have issued an arrest warrant for Ching, who has Taiwan and US dual nationality and reportedly fled to the States.

Prosecutors said they would continue to investigate the alleged involvement of three former top officials in the government of then President Chen Shui-bian.

Then vice-premier Chiou I-jen, Foreign Minister James Huang and Vice-Defence Minister Ko Chen-heng resigned in May over the scandal, although all three have denied any wrongdoing.

Diplomatic recognition is a big issue in Taiwan, which is formally recognised by only 23 countries. China considers the island part of its territory.

Taipei lost its UN seat to Beijing in 1971 and both sides were accused of using generous financial packages to woo allies away from each other.