Taiwan defense minister resigns over weapons flap

By Ralph Jennings

TAIPEI (Reuters) - Taiwan's defense minister resigned on Saturday due to a flap over a state-run firm set up to speed imports of advanced weaponry.

The controversy further tarnishes a presidential administration marred by corruption cases involving family members and aides.

"It was basically an embarrassment for the executive branch, because they violated a lot of rules," said Andrew Yang, secretary general of the China Council of Advanced Policy Studies in Taipei.

"(The resignation) is a sort of damage control."

Taiwan's cabinet accepted the resignation of defense Minister Lee Tien-yu, whose department launched Taiwan Goal, a state-run arms procurement company with a T$1 billion ($31.8 million) investment. The company's activities were also suspended.

"Since Taiwan Goal has been unable to operate and has generated concern from all walks of life, (Lee) feels deep regret and has offered to resign," the Ministry of National defense said in a statement.

Taiwan Goal's purpose was to accelerate weaponry imports that might otherwise be stalled by political wrangling and fears abroad of upsetting China.

Taiwan President Chen Shui-bian seeks to buy advanced U.S. weapons as China aims more missiles at the island. But Taiwan's opposition-controlled parliament has approved only part of a U.S. arms sales bill despite years of debate.