Six former employees of Huawei Technologies Co Ltd, the world’s third-largest smartphone maker, have been arrested by Chinese police for allegedly leaking commercial secrets to rivals.
News portal sina.com reported that an internal letter issued by Huawei’s consumer unit, which includes its smartphone business, said that the six, chiefly engineers and smartphone designers, had been arrested.
The incident came as the Shenzhen-based company is engaged in a fierce battle for market dominance with players such as Oppo Electronics Corp and Coolpad Group Ltd, state-run China Daily reported.
According to the report, the six were suspected of leaking commercial secrets to Coolpad and its largest shareholder LeEco after some of them left Huawei to join the two companies.
Huawei confirmed to China Daily that six of its former employees were arrested, but said the case has nothing to do with LeEco and CoolPad.
LeEco also denied the report.
Xiang Ligang, a smartphone expert and CEO of the telecoms industry website cctime.com, said the dispute underlines once again that China is the world’s most competitive smartphone market, with the largest number of handset vendors.
“For any new player which wants to scale up rapidly, such as LeEco, it has no other choice but to poach experienced talent from established companies,” Xiang added.
In 2016, Huawei shipped 139 million handsets, up 29 per cent year-on-year, International Data Corp said.
Huawei’s stellar growth has lured rivals to vie for its talent with handsome salary packages, the Daily report said.
Last year, a string of ex-Huawei senior executives joined LeEco and CoolPad. Liu Jiangfeng, the former president of Huawei’s smartphone sub-brand Honor, took the helm of CoolPad’s smartphone business in August.
Last month, Ren Zhengfei, founder and CEO of Huawei, said at an internal meeting that the company would step up staff management and crackdown on corruption and bribery.