Two held at Taipei airport over China 'spy' defector claims

Two directors of a Hong Kong-based investment fund are being held in Taiwan over sensational claims made by a Chinese defector, the company said Monday, in an unspooling spy saga dismissed by Beijing as "a clumsy farce".

Wang "William" Liqiang gave interviews to Australian media last week alleging he had given up Chinese spy secrets to Canberra's counter-espionage service.

Among the juicy details of his apparent tradecraft the 26-year-old Chinese national alleged he was recruited by the directors of a Hong Kong-based investment firm as cover for infiltrating the city's pro-democracy movement.

The reports said Wang alleged he was hired by Xiang Xin and Kung Ching, of the Hong Kong-registered China Innovation Investment Limited, to conduct spy-ops inside the territory as well as Taiwan and Australia.

Australian newspapers The Age and Sydney Morning Herald said Wang had given Australia's counter-espionage agency the identities of the pair.

On Monday the two directors were stopped as they tried to leave Taipei's Taoyuan Airport, China Innovation Investment Ltd said in a statement.

They are "staying in Taiwan" to cooperate with local investigators, the company said, denying any links to Wang or his claims.

Taiwan's Interior Minister Hsu Kuo-yung confirmed the pair were being held but told reporters he was unable "to comment on the specifics due to confidentiality of an ongoing investigation." The company, which on its website says it invests in energy products, also rubbished any link with Wang.

"Wang Liqiang was never an employee of the group," it said, calling the Australian news reports "fictitious and forged".

It fits a pattern of outright denials emerging from Beijing, which has rubbished Wang's lofty claims as bluster from an "unemployed" fraudster on the run from a suspended jail sentence.

Speaking in Beijing on Monday Foreign ministry spokesman Geng Shuang took a swipe at the "wrong positions" reported by some Australian media who have "acted out a clumsy farce".

"They have insisted on believing a suspected criminal with no credibility whatsoever", Geng said accusing the reports of "smearing and fabrication of rumours against China to an extreme".

Wang is currently living in Sydney with his wife and infant son on a tourist visa and has requested political asylum, according to Australian reports.