A man from Taiwan has been released on bail as part of the wider investigation into the Hong Kong-registered tanker accused of breaking UN sanctions by transferring oil to a North Korean ship.

Prosecutors in Taiwan suspect that Chen Shih-hsien was the oil dealer behind the transfer of the fuel.

He has been released on NT$1.5 million (US$50,000) bail and will face further questioning, according to a statement released on Thursday by the prosecutors office in the southern Taiwanese city of Kaohsiung. Chen denies any wrongdoing.

The tanker, Lighthouse Winmore, was seized by South Korean officials after it allegedly transferred about 600 tonnes of oil to a North Korean vessel in October.

Chen was summoned for questioning by Kaohsiung district prosecutors office late on Wednesday, prosecutors said.

The statement alleged that Chen was aware the tanker would transfer oil in international waters and he provided inaccurate information in an export declaration that the vessel’s destination was Hong Kong.

Chen was quoted by the Apple Daily newspaper in Taiwan as saying that he told investigators that he had helped a Chinese citizen to transfer the oil to another ship, but was unaware its destination was North Korea.

The Kaohsiung prosecutor’s office launched its investigation after South Korea’s foreign ministry said the tanker was inspected and sized by South Korean customs officials in November.

The vessel allegedly transferred the oil to a North Korean vessel in international waters in the Yellow Sea on October 19. The transfer would be in violation of United Nations Security Council sanctions imposed on North Korea in September.

The South Korean authorities say Lighthouse Winmore was chartered by the Taiwanese company Billions Bunker Group. Taiwan’s Maritime and Port Bureau has confirmed the company was incorporated in the Marshall Islands in the Pacific.

Taiwanese media have also reported that the company shares the same address in Kaohsiung with another firm where Chen works as a director.

The Lighthouse Winmore is owned by Win More Shipping and managed by Lighthouse Shipping Development, which have registered addresses in Guangzhou in southern China, according to the Hong Kong Companies Registry.

Zeng Haibo, a deputy general manager at Lighthouse Shipping, told the South China Morning Post the vessel had been chartered, but denied any knowledge of its use to trade with North Korea.