HTC reeling after police raids

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HTC reeling after police raids

Trade secrets feared stolen.

The investigation of senior managers at Taiwanese mobile phone manufacturer HTC for suspected fraud and passing on trade secrets to Chinese manufacturers has resulted in the company's share price plummeting.

HTC shares are currently down sharply, having dropped over 42 percent as news of the fraud investigation shook investor confidence. Yesterday, the shares fell by 5.75 percent, having lost the maximum allowed 7 percent at midday.

Source: Yahoo Finance

Last week, Taiwanese prosecutors raided HTC offices in order to investigate some of the company's high-ranking design staff, who are accused of stealing trade secrets and fraud to the tune of NT$10 million (A$371,000), the China Post reported.

The police investigation started after three of HTC's senior designers set up businesses of their own in Taiwan and China, taking on contract work outside the company.

HTC reportedly fears that the three have stolen trade secrets for a new user interface, scheduled to be released later this year.

Yesterday, HTC chief executive Peter Chou attempted to rally the company's workers to strengthen their resolve in an open letter to all staff.

Chou said there would be wide-ranging improvements to the company's structure and organisation and that the trade secret leaks would not affect HTC or future product launches.

HTC has fallen behind its Android competitors over past years and has struggled to regain momentum.

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