Taiwanese prosecutors are investigating three of HTC’s employees for stealing trade secrets to sell to Chinese firms and fraud, according to recent reports.
HTC’s research and development centre as well as the suspects’ offices and homes were searched by authorities after the company accused them of stealing key interface technology, the Taipei-based China Times newspaper reported.
HTC told the paper that the three men – Vice President of Product Design Thomas Chien, R&D director Wu Chien Hung and design team senior manager Justin Huang – were suspected of discussing plans with unidentified Chinese firms to acquire HTC’s technology.
The technology in question is to be used in HTC’s new Sense 6.0 smartphones, which are set to be unveiled later this year.
The company accused the trio of stealing trade secrets and breach of trust. Both offences carry a maximum 10-year jail term.
The three were also accused of illegally claiming more than Tw$10 million ($330,000) in design fees from the company with falsified vouchers, the China Times added. The design fees were for the One’s aluminium chassis design. While the design was done in-house, the three men used an external design firm to invoice HTC for over $334,000 worth of commission fees between May and July, according to the paper. The paper then alleged that the trio split the money between themselves.
After authorities jumped in, they learned the men were said to have set up their own smartphone design companies in both Taiwan and China, according to the state Central News Agency.
“The matter is under investigation by relevant authorities. We therefore refrain from further comments,” HTC said in a statement.
As well as selling its own smartphones, HTC makes handsets for a number of leading US companies and also supplies Google’s Nexus One.
The firm has been struggling against fierce competition from international rivals, and second quarter net profit plunged 83 percent compared to last year.
According to research firm IDC, HTC held a 4.6 percent share of the global smartphone market in 2012, a sharp decline from 8.8 percent a year earlier. Samsung held a 30.3 percent stake while Apple had 19.1 percent.
Update – added comments from Taipei deputy chief prosecuto:
Currently, two of three employees are being detained, Taipei deputy chief prosecutor Huang Mou-Hsin said Monday. One of them is Thomas Chien, HTC’s vice president of product design, he added.
Huang declined to comment on the nature of the HTC secrets leaked.
