On September 2, the Taiwanese smartphone maker’s shares tumbled 6% after three HTC Corp design executives were arrested in Taipei, Taiwan, The Independent said. The shares plummeted to an eight-year low. To compare, the Taiwan Stock Exchange TAIEX Index, the country’s major stock market index, dropped 0.2%.
The police confirmed that HTC design directors were arrested last weekend. Justin Huang, HTC One developer, vice president of product design Thomas Chien, and HTC research and development director Wu Chien-Hung were among those arrested. They were accused of trying to leak trade secrets to Chinese rivals.
They are said to have wanted to sell the technology which is used in HTC's yet-to-be-announced Sense 6.0 smartphones. HTC Chairwoman Cher Wang reported the data was stolen; top managers’ fraudulent gains were estimated at about $350 thousand.
Most of the suspects have been released on bail. However, Wu Chien-Hung and Thomas Chien are kept in custody as prosecutors worry that they might flee the country.
Compared with early 2013, HTC shares plunged 50%. The company warned that it can end the latter part of the year with the operating loss of up to 8% for the first time.
HTC latest failures stem from a sharp increase in competition in the cheap smartphones marketplace. As for more expensive segment, its growth decelerated because of gradual market saturation, thus weighing on the corporation’s performance.