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Taiwan arrests 6 people on suspicion of leaking BASF technology

Taiwan-arrests-6-GBO

According to investigators, the Chinese company paid engineers almost $6million for transferring the company’s technology to a Chinese rival

The Criminal Investigation Bureau, Taiwan’s equivalent of the FBI, said on Monday that Jiangyin Jianghua Microelectronics Materials had poached a group of executives formerly and currently employed by BASF in Taiwan and paid them Rmb40m ($5.8m) to transfer BASF technology. Jiangyin Jianghua is a Shanghai-listed company based in the eastern Chinese province of Jiangsu.

The case was publicised by the CIB just at the time when US officials began negotiations in China aimed at implementing the trade war truce between president Donald Trump and Xi Jinping. Concers from multinational companies about the theft of their commercial secrets in China have also helped to drive the current trade tensions.

The CIB’s accusations mirror a series of cases in which Chinese companies were accused to extracting proprietary technology from Taiwanese or multinational companies via engineers from Taiwan—one of the world’s most important hubs for the electronics industry.

In November, the US government hit Fujian Jinhua, a leading Chinese chipmaker, with sanctions and filed charges against the company for stealing technology from US memory chipmaker Micron. In this case, Taiwanese engineers were allegedly lured into leaving and bringing their former employer’s commercial secrets.

Regarding the BASF case, the CIB said the six engineers under investigation handed over details for the production of chemicals used in the electronics sector and were expected to oversee the construction of, and ramp-up manufacturing in, a new electronics materials plant using that technology in China. 

According to the investigators, Jiangyin Jianghua in 2017 first hired a retired former director of a BASF plant in the Taiwanese city of Taoyuan. This person, in turn, allegedly poached BASF engineers in charge of production and process technology to join the Chinese rival.

That group then worked with a current BASF executive in charge of plant construction to transfer the German group’s “key technologies and processes” to a new electronics materials plant for Jianghua, the CIB said.

Against the backdrop of Washington’s assault on Beijing’s aggressive pursuit of technology, the Chinese government has in recent months tried to play down policies such as its China 2025 agenda to dominate the next generation of key technologies.

“This case may remind people that the underlying problems are still there, that the related behaviour is still continuing,” stated a western diplomat in Taipei.

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