Drone firm executives detained over alleged use of China-made chips

Taipei, Oct. 12 (CNA) Two executives of drone supplier Jiin Ming Industry Co. have been detained and held incommunicado over the company's alleged use of prohibited China-made chips and camera lenses in drones supplied under recent military contracts, the Taoyuan District Prosecutors Office said Monday.

In a statement, the prosecutors said they raided the offices of Jiin Ming -- headquartered in Taoyuan -- as well as those of its subsidiaries and its suppliers on Oct. 8. The raids followed a report that the company had breached its procurement contracts by putting the prohibited components into drones delivered to the military.

During the raids, prosecutors summoned Jiin Ming Vice Chairman and President Chien Hao-ting (簡豪廷), business manager Chen Yang-cheng (陳揚澄), seven other people connected to the case and a witness for questioning. They also seized items as evidence.

After questioning, prosecutors said they suspected Chien and Chen of violating the National Security Act by knowingly supplying Chinese-made products under military procurement contracts. The two are also suspected of submitting falsified business records and of aggravated fraud committed by three or more people under the Criminal Code, prosecutors said.

Prosecutors said they considered the two at risk of committing further offenses or interfering with the investigation, and sought their detention.

According to prosecutors, the Taoyuan District Court cited the case's national security implications and the possibility that others were involved. It also said that Chien, who had given inconsistent statements, might collude with others on testimony or flee.

In Chen's case, the court said that although he denied the allegations during questioning, he was still strongly suspected of involvement in the alleged crimes, prosecutors said.

The court also said the number of transactions and the volume of sales between Chen and the military, as detailed in the detention application, suggested a risk of repeat offenses, prosecutors said.

The court ordered both men detained for two months from Oct. 9 and barred them from receiving visitors or communicating with others. The ruling can be appealed within 10 days of receiving the court documents.

The other suspects were released without bail, prosecutors said.

In a separate statement, Jiin Ming, which is listed on the over-the-counter (OTC) market run by the Taipei Exchange, confirmed Chien's detention and said Chairman Tsai Hsiang-feng (蔡翔峰) had assumed his duties.

The company said its operations were continuing as normal despite the case and that it would cooperate with the investigation.