A court has sentenced the head of a Taiwan company to 20 years in prison for his role in a "gutter oil" scandal that gripped the island's food industry and brought down a senior official.

Yeh Wen-hsiang, chairman of Chang Guann Co, was also fined $1.6 million for his part in selling 243 metric tons of tainted oil collected from cookers, fryers and grease traps, as well as recycled grease from leather processing plants.

Yeh was first detained in September after the accusations came to light, but he was released on bail in October. Last week, he was found guilty of safety violations, and he was sentenced on Friday.

Hundreds of tons of cakes, bread, instant noodles, cookies, steamed buns and dumplings had to be removed from shelves in Taiwan and Hong Kong when the case surfaced, authorities said.

The contaminated fat was mixed with regular lard and distributed to clients in the food industry.

More than 1,000 restaurants, bakeries and food plants in Taiwan had used the tainted oil, according to the food and drug administration, and the resulting outcry led to the resignation of the island's top health official.

Tsai Chi-chuan, the company's vice-president, was also given a 20-year sentence for food safety violations, according to a statement released by the Pingtung District Court, in the south of the island.

Kuo Lieh-cheng, the manager of an unlicensed factory that supplied the company, was imprisoned for 12 years, while a worker from the same factory was sentenced to eight years, it said.

Taiwan had pushed for an amendment to the law to raise prison terms and fines for food safety violations, and it offered whistleblowers more incentives in the wake of the case.

Yeh's "gutter oil" case was the first in a string of scandals, with Taiwan food giant Ting Hsin group accused of selling oil intended for animal food just one month later.

Two businessmen were then charged with using banned industrial dyes to adulterate food products in December last year, also prompting mass recalls.