January 7, 2019 / 11:12 AM / 2 years ago

BASF workers in Taiwan suspected of leaking company secrets

TAIPEI/FRANKFURT (Reuters) - Taiwan is investigating six current and former employees of BASF’s (BASFn.DE) local operations suspected of leaking corporate secrets to a rival Chinese company, an official said on Monday.

Five employees were detained and one had been granted bail by a court, Lu Sung Hao, Taipei-based director of Taiwan’s Crime Investigation Bureau, told Reuters. The prosecution has not filed any charges against them.

The case comes amid fears among officials and executives around the globe about industrial espionage by China.

The Bureau said in a statement that a senior manager was suspected of stealing electronic manufacturing processes, technology, and other trade secrets, and leaking and selling them to a competitor in China for a high price.

The company that paid for the information was identified as China’s Jiangyin Jianghua Microelectronics Materials Co. (603078.SS), which had offered 40 million yuan ($5.8 million) to the current and former employees in return for the technology transfer to build a factory in China, Lu said.

The employees had received a series of payments totalling T$40 million ($1.30 million) late last year in two bank accounts, Lu said.

Jianghua Micro said in an e-mail to Reuters on Tuesday that it had not received any official letter with the investigation’s allegations.

“The company has never used Taiwan dollars, the renminbi, U.S. dollars or any currency to pay for data,” it said in the e-mail that was signed by its board secretary office. “The company’s employees all strictly abide by China’s labor and contract laws.”

The company, which also said that it owns 58 patents, says on its website that it manufactures and supplies wet electronic chemicals that are used in products like semiconductors and flat panel displays.

German chemical company BASF said that only one of the people under investigation is a current employee and that the individual’s contract had now been suspended.

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

The company and the Bureau both declined to provide any estimate on financial losses.

Officials in Taiwan and the United States have been accusing Chinese companies of intellectual property theft amid China’s multi-billion drive to cut reliance on foreign chips and build up its own semiconductor industry.

Taiwan has vowed to defend its chip industry, the island’s economic backbone, by tightening its regulations and penalties on corporate espionage.

Reuters reported in November that German prosecutors were pressing criminal charges against a former employee of chemicals maker Lanxess (LXSG.DE) for allegedly stealing trade secrets to set up a Chinese copycat chemical reactor.

Reporting by Tom Sims in Frankfurt and Yi-Mou Lee in Taipei, additional reporting by Jessica Macy Yu in Taipei and Brenda Goh in Shanghai; Editing by Kirsten Donovan/Keith Weir & Simon Cameron-Moore

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