Thu, Sep 14, 2006 - Page 11 News List

Report causes Acon to dip

SERIOUS ALLEGATIONS The electronics component firm's president is suspected of illegally obtaining GPS technology, employees and partners from Yaego Corp


Shares of Advanced Connectek Inc (Acon, 連展科技) tumbled by the 7 percent daily limit yesterday on reports that the president of the connector and peripheral component maker is being investigated for alleged corporate espionage.

The Bureau of Investigation has searched the residence of Frank Chen (陳鴻儀), the president of Acon, because Chen allegedly bribed Chiu Tsung-wen (邱宗文), the deputy manager of passive component supplier Yageo Corp's (國巨) research division, to obtain a global positioning system (GPS) developed by Yageo, according to Chinese-language news reports yesterday.

Chiu is suspected of sending information on the GPS to Chen by e-mail from 2003 until last year, allowing Acon to produce the same product at lower prices and undercut Yageo in the market, the report said, adding that the investigators have seized Chiu's computer and portable drives for further investigation.

Moreover, Chiu is alleged to have helped Acon snatch clients and partners from Yageo, the report said.

Yageo refused to comment on the report.

Acon said in a statement filed with the Taiwan Stock Exchange yesterday that most of the report was incorrect and that it has damaged the firm's reputation. Acon may take legal action to fight the report's allegations, it said in the filing.

Yageo sued Acon at the end of last month for infringing on its intellectual property rights for antenna products, accusing Acon of "systematically" poaching employees from Yageo and misappropriating technology and trade secrets obtained from the former employees, leading to considerable losses for the company.

The Taipei District Court also approved Yageo's application to freeze Acon assets worth NT$423 million (US$12.86 million), the reports said.

After filing the IPR infringement case, Yageo also brought lawsuits against Acon for violating civil and criminal laws as well as the Fair Trade Act (公平交易法), the reports said.

Yageo may also take legal actions against Acon in overseas markets to ensure its rights, according to the reports.

Trading of Acon shares ended at NT$19.05 on the Taiwan Stock Exchange yesterday, and shares of Yageo rose NT$0.05 to close at NT$11.1.

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