The Chinese ‘business model’

There are a growing number of instances where Chinese companies are luring top executives with large sums of money to leak and sell corporate and industrial secrets so that they can set up base in China. Former and past BASF employees suspected to have leaked and sold industrial and corporate secrets to Chinese companies.

In a development that once again points the finger of suspicion at the Chinese for economic theft and underscores U.S. concerns that form the basis of the current trade war between the two countries, Taiwan’s Crime Investigation Bureau is investigating six current and former employees of BASF in the country for the suspected leaking of corporate secrets to a rival Chinese company.

The prosecution has yet to file any charges against them.

The case underscores global concerns of corporate and industrial espionage by Beijing.

According to Taiwan’s Investigative Bureau, a senior manager is suspected to have stolen electronic manufacturing processes, technology, and other trade secrets, and either leaking and selling the same to a Chinese rival.

In a statement, the Bureau said, China’s Jiangyin Jianghua Microelectronics Materials Co. has been identified as the prime suspect which offered $5.8 million to BASF’s current and former employees in return for the technology transfer, in order to build a factory in China, said Lu.

He went on to add, the employees had received a series of payments totalling $1.30 million (T$40 million) late last year in two bank accounts, said Lu.

As per Jianghua Micro, it had not received any official letter from the investigation agency containing these allegations.

“The company has never used Taiwan dollars, the renminbi, U.S. dollars or any currency to pay for data,” said Jianghua Micro in an e-mail to Reuters that was signed by its board secretary office.

“The company’s employees all strictly abide by China’s labor and contract laws.”

According to the company’s website, it owns 58 patents and supplies wet electronic chemicals that are used in products like flat panel displays and semiconductors.

According to a statement by BASF, one of those under investigation is a current employee and that the individual’s contract has now been suspended.

“We have taken immediate steps to support the investigation led by local law enforcement officials and protect the relevant information,” said BASF.

Neither BASF nor the Bureau quantified the estimate financial losses on account of this leak and theft.

China is trying to slash its reliance on foreign chips and build its own semiconductor industry.

U.S. and Taiwanese officials have blamed China for past industrial and corporate thefts. On its part, Taiwan has vowed to defend its chip industry, its economic backbone, by tightening its regulations and penalties on corporate espionage.

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Categories: Creativity, Economy & Finance, Entrepreneurship, HR & Organization, Regulations & Legal, Strategy

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