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The Sydney Morning Herald yesterday reported that HTC employees have been interrogated, with two arrested and detained on allegations that some of the company’s trade secrets have been leaked illegally.

Engadget says a total of five staff were interrogated, naming Vice President of Product Design Thomas Chien, R&D director Wu Chien Hung and design team senior manager Justin Huang, adding that Chien and Wu were detained while the others were released on bail. SMH (via Bloomberg) mentions that a fifth person – an outsider – is also under investigation, although its unclear if this information is up to date.

The company filed complaints to the Ministry of Justice’s Investigation Bureau last month in which it is accusing the employees of leaking commercial secrets and also using fake receipts to seek reimbursement. Investigators searched HTC’s company headquarters, along with the employees homes on August 30.

Engadget reports that the designers had planned to set up their own company, and had leaked documents regarding the next version of HTC’s Sense software. HTC also claims that the trio used an external design firm to invoice the company for design services relating to the HTC One’s aluminium chassis.

HTC released a statement on their blog, though the entry seems to have been pulled. According to Engadget, the statement read:

The company expects employees to observe and practice the highest levels of integrity and ethics. Protecting the company’s proprietary and intellectual properties, privacy and security is a core fundamental responsibility of every employee. The company does not compromise nor condone any violation at any level of our organization and the company shall act in accordance to the law. As this matter is currently under investigation by the relevant authorities, we therefore refrain from further comments.

In addition, the company has sufficient resources in our design team and this situation will not impact the company’s operations, product portfolio plans and our overall business performance.

HTC has been no stranger to controversy this year, seeing a a number of high profile departures as its profit woes continue.

Amid speculation on the damage this could do (or may have already done) to HTC, and in light of the fact that the company says it won’t impact their operations, it’s worth remembering that the company yesterday announced four products – a blue version of its flagship HTC One, two new Desire devices and a portable subwoofer.

Source: SMHEngadget.