TAIPEI (AFP) - A Taiwanese businessman is under investigation on suspicion of selling oil to North Korea in violation of UN sanctions, prosecutors said Thursday (Jan 4), reportedly in connection to a ship seized by South Korea.

Seoul said last week it had detained a Hong Kong-registered ship in November suspected of transferring oil products to a North Korean vessel, contravening bans imposed over Pyongyang's missile and nuclear programme.

Prosecutors said in a statement that the man, surnamed Chen, had falsely declared that a ship he chartered was bound for Hong Kong when it actually sailed to international waters to sell oil.

"We take this case very seriously and have immediately formed a taskforce to investigate this," said the district prosecutor's office in the southern city of Kaohsiung, where Chen runs a fishery company.

They did not comment on reports that Chen's ship was the Lighthouse Winmore, which was impounded in November by South Korean authorities after it allegedly transferred 600 tonnes of oil to a North Korean vessel.

The ship had visited South Korea's port of Yeosu on Oct 11 and loaded up on some 14,000 tonnes of Japanese refined oil before heading towards its purported destination in Taiwan, customs officials have said.

South Korean authorities said that the vessel, chartered by the Taiwanese firm Billions Bunker Group Corp, made the transfer to the North's Sam Jong 2 in international waters off China before returning to Yeosu.

Chinese-language daily The Liberty Times said Chen sold oil products through "a Chinese middleman" and had told prosecutors he did not know they were bound for a North Korean vessel.

He has been released on bail and barred from leaving the island pending further investigation.

The UN Security Council imposed three sets of sanctions on North Korea last year.

The first was made on Aug 5, targeting the iron, coal and fishing industries, with another set on Sept 11 aimed at textiles and oil. The most recent on Dec 22 focused on refined petroleum products.

A Panama-flagged ship was also detained by the South two weeks ago over alleged ship-to-ship oil transfers, Yonhap news agency said on Sunday.

The US had asked the Security Council to blacklist 10 ships - including the Lighthouse Winmore - for violating sanctions against the North.

However China objected to the proposal and only agreed to blacklist four vessels.

The Taiwanese government has said the Billions Bunker Group is not incorporated in Taiwan but in the Marshall Islands, and that it would "continue to fully comply" with UN sanctions against North Korea.