HTC designers detained in trade secret theft

The logo of HTC is seen in Taipei

TAIPEI - Two senior design professionals at HTC, Taiwan's largest smartphone maker, were detained incommunicado yesterday afternoon on charges of violating the Securities and Exchange Act and the Trade Secrets Act, according to Taipei District Court.

The court upheld a request made by the Taipei District Prosecutors' Office to hold incommunicado Chien Chih-lin, vice president of HTC's research and development (R&D) department, and Wu Chien-hung, director of the firm's design department, as the two were thought likely to collude over their alleged theft of trade secrets and defrauding of HTC of nearly NT$10 million (S$425, 700).

Meanwhile, Huang Hung-yi, a design engineer at HTC, was released on bail of NT$300,000 after being questioned at the court session.

In early August, HTC accused the three of fraud, and asked the Bureau of Investigation under the Ministry of Justice to conduct an investigation.

Bureau investigators said that they had received a complaint from HTC earlier this month that said the three suspects had set up design companies in both Taiwan and mainland China, and may have stolen the trade secrets of a crucial new interface, which is due to be released later this year.

Furthermore, the three suspects allegedly conspired with a manufacturer to issue fake invoices amounting to nearly NT$10 million for designing cellphone cases. Upon receiving the money from HTC, the manufacturer allegedly transferred it to the three suspects.

Investigators moved to question the suspects and raided their homes and offices after the stock market closed on Friday afternoon, so as not to affect HTC's share price.

Investigators seized the suspects' phones and laptops, as the three may have transferred business secrets via email or stored them in electronic devices. The investigators will examine the devices to check whether trade secrets have been stolen and transferred to mainland China.