Yahoo Finance

(Bloomberg) -- Taiwanese prosecutors have indicted the head of Luxshare Precision Industry Co. for using a shell company to surreptitiously take over a key local company, ratcheting up accusations of technology theft directed at mainland Chinese companies.

Most Read from Bloomberg

• Russia Privately Warns of Deep and Prolonged Economic Damage

• Energy Trading Stressed by Margin Calls of $1.5 Trillion

• Stocks End Well Off Lows With S&P 500 Above 3,900: Markets Wrap

• Indian Billionaire Closes In on Bezos With 1,000% Stock Surge

• California Avoids Blackouts With Bigger Test Ahead as Heat Looms

Prosecutors alleged in a court filing that Luxshare Chairwoman Grace Wang used a Hong Kong firm to mask her company’s identity and buy shares in Speed Tech Corp. in 2012, according to a copy of the document seen by Bloomberg News. Taiwanese law forbids mainland Chinese companies from conducting business on the island without approval from the local authorities.

American agencies including the FBI have accused Beijing of encouraging people to steal technology that advances its own interests. Taipei sees the outflow of silicon engineers and technology to mainland companies as a key national security issue, and this year began to enforce regulations prohibiting Chinese firms from hiring away top-flight talent in sensitive sectors such as chips.

Luxshare joined the exclusive club of global iPhone assemblers in recent years, marking a seismic shift to a decade-old production model just as Washington-Beijing tensions escalated. It struck a deal to acquire Wistron Corp.’s iPhone unit and become the first mainland company to assemble Apple Inc.’s marquee device.

Luxshare is among the largest of a crop of fast-rising Chinese electronics houses increasingly snatching Apple orders away from established firms like Hon Hai Precision Industry Co. It’s become the world’s biggest maker of AirPods -- one of the fastest-selling consumer accessories in the market before Covid and a global economic downturn hammered demand for electronics.

Representatives for the company didn’t respond to requests for comment.

Read more: Engineer Charged With Stealing Chip Technology Thriving in China

Most Read from Bloomberg Businessweek

• The Republicans Have a Peter Thiel Problem

• Women Who Stay Single and Don’t Have Kids Are Getting Richer

• Startup Wants to Chart Path to More Equitable Urban Development

• Russia’s Conspiracy-Theory Factory Is Swaying a Brand-New Audience

• A New Contaminant Found in Popular Drugs Could Cost Big Pharma Millions

©2022 Bloomberg L.P.