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Firm's tech sale to China probed

The government is investigating the suspected illegal sale of sensitive military technology by a local company to China, a Chinese-language newspaper reported yesterday.

The company, Queening Hi-Tech Co, was suspected of smuggling infrared technology through a Hong Kong subsidiary to companies linked to the Chinese military, the reports said.

The case has also attracted attention from the US because the technology originates from a California-based subsidiary of QHT, the newspaper said.

The infrared technology could be used for medical but also for military purposes, the newspaper said, adding that the US bans the export of such technology to China, North Korea, Libya, Iran and Iraq.

The Investigation Bureau questioned the company's general manager, Shih Kuei-chung (石桂崇), on Friday and searched his home and those of four other employees, the paper said.

The US FBI arrested his brother, Shih Kuei-sung (石桂嵩), in San Francisco last month, the newspaper reported.

The Investigation Bureau and the Hsinchu chief prosecutor were not available for comment. QHT is based in the Hsinchu Science-based Industrial Park.

According to a report in another Chinese-language newspaper, Shih Kuei-chung claims that the whole incident is a result of the US government and arms dealers acting in their own political and commercial interests, and that his company has not broken any laws.

According to the report, QHT worries that the incident will destroy the reputation and business opportunities built by the company over the past 11 years. The company plans to publish a statement in newspapers tomorrow to explain the situation, file a lawsuit against claims that the company has been involved in espionage for China and ask that the government compensate QHT for any losses resulting from government agencies not providing the protection the company is legally entitled to.

The report goes on to quote Shih Kuei-chung as saying that QHT during its first five years of operations purchased optical infrared sensory equipment from the US, which was then imported to Taiwan and further developed into various infrared equipment for domestic military and civilian use, stressing that none of the equipment was sold outside this country.

Shih Kuei-chung, claiming that QHT no longer uses US equipment, is also reported as saying that because US legislation restricts re-exports of sensitive technology originating in the US, the company began purchasing its equipment from France six years ago, since French legislation does not include such restrictions.
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