BASF workers in Taiwan suspected of leaking company secrets to Chinese firm | InfoWatch

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BASF workers in Taiwan suspected of leaking company secrets to Chinese firm

Taiwan is investigating six current and former employees of BASF’s local operations suspected of leaking corporate secrets to a rival Chinese company, according to The Epoch Times.

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., 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 Chinese company was not available for immediate comment late on Monday.

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

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 for allegedly stealing trade secrets to set up a Chinese copycat chemical reactor.

The case underscores fears among German officials and executives about industrial espionage in Europe’s largest manufacturing nation.

State prosecutors in the city of Cologne, where the company is headquartered, told Reuters they had brought criminal charges in June against a Chinese-born German national based on a complaint filed with police by Lanxess about two years ago.

There have been several reports in Germany of manufacturers with operations in China catching local staff doing work for copycat rivals. But the alleged data theft at Lanxess is a rare case in which a suspected leak has been identified at home.

German intelligence agency BfV in July warned companies in its annual report that China could resort to intellectual property theft as it aspires to become an exporter of high-tech products, adding that it is hard to distinguish between state and industrial espionage.