Former executive held for industrial spying

TAIPEI, Taiwan, The China Post Staff and Agencies

A former executive at the Taiwan branch of U.S. firm, Dow Chemical, was detained for alleged involvement in what could be a major industrial espionage case, police said yesterday. Du Zhong-qian, a former technical manager at Dow Chemical Taiwan Ltd., was arrested late Friday at the Chiang Kai-shek International Airport upon his return from an overseas trip, the National Police Administration said in a statement.

He is suspected of stealing confidential technical data from the multinational company, which he left in late April after 14 years.

Police also confiscated a portable computer hard drive containing “important trade secrets of Dow Chemical”, as well as 14 discs, nine CDs and two ZIP discs from his Taipei home, the statement said.

Police said that Du had downloaded high-tech information from a key company database before he left.

An initial estimate by the company found the business loss in intellectual property rights in the theft could reach more than NT$210 million, police said.

Dow Chemical, the world’s fifth largest chemicals company and listed among the Fortune 500 major corporations, has reportedly filed a lawsuit against Du for allegedly breaching trust and confidentiality after he left Taipei for a trip to China on July 7.

The Taipei Prosecutors’ Office has assigned prosecutor Chu Shai-chun to handle the case.

Police and Dow Chemical executives from the U.S. and Hong Kong are investigating if Du had infringed on the company’s IPR and used the stolen data to develop new products for companies he set up with partners in Hong Kong and Shanghai between May and July this year.

Dow Chemical had reportedly invested some US$1 billion to develop the database, which covers the company’s research and development plans and the latest information in the areas of chemistry, chemical engineering, petrochemical, medical and environmental sciences.

Starting from the basic level in the Taiwan branch, Du became one of the three “technical leaders” in Dow Chemical’s Asia-Pacific division in 2001. Du left the company in late April, citing family and health reasons. But he has recently set up his own companies to develop products similar to those of Dow Chemical, including the air-ventilating stuffing materials for bras. Dow Chemical also has branch offices in major Chinese cities.

Du denied the allegation as a commercial spy, claiming that the materials on the hard drive and discs seized by the police were accumulated for his personal use. Police said the investigation will be carried out with the aid and clarification of experts from Dow Chemical. Dow Chemical said there is still no evidence showing Du’s alleged breach of IPR would be worth about NT$20 billion in commercial value as reported by the local media.