Former Taiwan leader Lee Teng-hui was charged by prosecutors Thursday for embezzling public funds of 7.79 million U.S. dollars during his tenure.

Prosecutors also indicted Liu Tai-ying, founder of the Taiwan Research Institute, according to a statement on the website of the island's prosecutors office.

Lee stands accused of embezzling national security funds, laundering the money for personal use, and transferring it to Liu when he was in office from 1988 to 2000.

Liu was charged with laundering the money for personal use and paying expenses of the Taiwan Research Institute with it, the statement said.

Taiwan local media quoted the spokesperson of Lee's office as saying that Lee was shocked to learn the news and would defend his reputation.

Lee will not be the first leader in Taiwan to be taken to court. His successor Chen Shui-bian is currently serving a jail term of 17 and a half years on two bribery convictions, which marks the first time that a former leader of Taiwan has been jailed.