Gou Taiming believes that in the field of IT foundry, the scale of BYD is less than 1/10 of Foxconn, and even believes that BYD is not even as good as a "cottage", "The cottage is at most just a copy, learn your appearance." But BYD doesn't just copy, it's stealing. He sent commercial spies, stole our information, and then annihilated the evidence. Gou constantly emphasized: "For the company that steals, I will never treat him as an opponent." ”
Gou even asked Buffett: "I want to ask if Buffett dares to drive BYD's electric and gasoline dual-mode cars to and from work in person?" "Why invest in BYD, which steals Foxconn's trade secrets?"
Foxconn is the largest, fastest growing and most highly rated international group in the global 3C (Computers, Communications equipment, Consumer products) foundry field, and its subsidiaries are not only listed on the Asian and European stock exchanges, but also include the top three exporters in the Czech Republic, the largest exporters in Greater China, Forbes and Fortune The world's top 500 enterprises and the world's leading 3C foundry service field.
Foxconn has dozens of subsidiaries in Chinese mainland, Taiwan, as well as the Americas, Europe and Japan. In 1988, Foxconn began to invest in Chinese mainland, creating eight science and technology industrial parks in South China, East China, North China and other places. Since 1991, the Group's average annual operating income has maintained a compound growth rate of more than 50%.
Compared with Foxconn's huge annual revenue of tens of billions of dollars, BYD's annual revenue of only 12.9 billion yuan must be too weak. However, that is, BYD gave the OEM emperor Gou Taiming a headache.
The duel between Gou Taiming and Wang Chuanfu is a duel between the big guys and the rising stars. The competition for the mobile phone foundry business has become a fire, and the "Forbes dispute" has twists and turns, which is gripping. It is unknown who killed the deer.
In March 2007, BYD issued an announcement announcing that it was preparing to spin off and list the mobile phone OEM business. At this time, Gou Taiming made a move. He wants to end BYD's rapid development. So a dragon and tiger battle between two manufacturing giants, dubbed the "Forbes dispute" by the media, was officially staged.
On June 12, 2007, two subsidiaries of Gou's Foxconn Group, Shenzhen Futaihong Precision Industry Co., Ltd. and Hongfujin Precision Industry (Shenzhen) Co., Ltd., filed a lawsuit in the High Court of Hong Kong, China: BYD knowingly used confidential business information from Foxconn to establish a mobile phone production system that was extremely similar to Foxconn, causing the company to lose contracts worth 5.13 billion yuan. They pointed out that BYD must immediately stop using the classified information, hand over the profits derived from the use of the confidential information and compensate Foxconn for its losses.
At the hearing, Foxconn disclosed that on November 27, 2002, in order to negotiate cooperation projects, the mainland headquarters of Foxconn Group invited Wang Chuanfu, chairman of BYD, and his party to visit and inspect the production line of Foxconn's mobile phone factory, but later failed to reach a cooperation intention. In the same year, BYD began to establish the third business unit and began to process mobile phone parts as an agent.
However, since the beginning of 2003, BYD has continuously lured Foxconn employees to leave by various means and jumped to work for BYD, and the number of job-hoppers has reached more than 400, including senior technical talents and senior managers that Foxconn spent hundreds of thousands of yuan to send to Europe to train. Foxconn also continues to find that BYD technicians send emails to internal Foxconn employees, luring them to work at BYD, and promising preferential treatment for those who change jobs.
Foxconn emphasized in the lawsuit that BYD's mobile phone business from scratch, from weak to strong, this explosive growth is very abnormal, and this growth process is consistent with the loss of Foxconn's trade secret documents (that is, system files) and a large number of employees to jump jobs.
According to a media outlet in Taiwan, the direct reason why Foxconn wants to accuse BYD of stealing trade secrets is that BYD poached Foxconn's senior director of research and development in Japan, and brought a key technology, which is a metallurgical refining and synthesis technology that improves the accuracy and density of any metal powder, which can not only increase production, reduce losses, prevent corrosion and extend the service life, but also reduce costs.
A senior Foxconn official said that the poaching between companies was originally understandable, but this time it was not trivial, because BYD's poaching involved the company's trade secrets. According to the person, BYD has poached from Foxconn many times and even set up a poaching office.
It should be said that some of Foxconn's accusations are also true. In 2003, BYD entered the mobile phone OEM business, and for a while, the supply of talents was not available, and it had no choice but to recruit people from other companies. BYD began digging the foot of Foxconn's wall in 2003, and in 2005, a number of executives switched to BYD, and by 2008, it is said that a total of 400 Foxconn technicians and managers were dug into BYD.
Gou Taiming is really angry about this, believing that BYD, as a company that started with mobile phone batteries, has risen rapidly in a few years, and its business has covered almost all mobile phone parts except mobile phone chips, such as mobile phone batteries, LCD screens, and keyboards. In the first half of 2007 alone, mobile phone components and assembly accounted for 37% of BYD's performance. Obviously, the rapid development of BYD's mobile phone business is directly related to its continuous recruitment from Foxconn.
Foxconn couldn't bear it anymore, so it filed a lawsuit against BYD. Of course, this is not the first time Foxconn has sued BYD, and before this prosecution, Foxconn had sued BYD once.
On August 31, 2006, Foxconn claimed 70 million yuan from BYD Co., Ltd. and two former Foxconn employees. The two employees who left the lawsuit, named Liu Xiangjun and Si Shaoqing, were employees of Shenzhen Futaihong Precision Industry Co., Ltd. and Hongfujin Precision Industry (Shenzhen) Co., Ltd., a subsidiary of Foxconn Technology Group, and the two jumped to BYD Co., Ltd. in 2006. Foxconn sued the two employees and BYD for infringing trade technology secrets, claiming up to 70 million yuan from the above-mentioned defendants, and asked the court to order BYD Co., Ltd. to immediately stop unfair competition that infringed trade technology secrets.
This is another sky-high claim case that Foxconn broke out after suing Weng Bao, the editorial board member of China Business Daily, and Wang You, a reporter. On June 15, 2006, China Business Daily published a report written by reporter Wang Youcai entitled "Foxconn employees: The machine punished you for standing for 12 hours". Hongfujin sued the newspaper's reporter Wang You and editorial board member Weng Bao for "infringing on the right to reputation" and claimed 30 million yuan.
The day after suing BYD, Foxconn reduced the amount of the claim from 70 million to 5 million after consideration. A few days later, the police released Liu Xiangjun's brother-in-law. Liu Xiangjun's brother-in-law works at Foxconn, and due to the influence of Liu Xiangjun's job-hopping, he was previously detained by Foxconn for leaking company secrets and handed over to the public security organs.
The case went on and off for a year without a result. By June 2007, in order to block the spin-off and listing of BYD Electronics, Foxconn again filed a lawsuit in the Hong Kong High Court on the same grounds: BYD knowingly used confidential business information from Foxconn to establish a mobile phone production system that was very similar to Foxconn, causing the company to lose contracts worth 5.13 billion yuan.
On October 5, 2007, in order to expedite the ruling of the Hong Kong litigation, Foxconn filed its complaint again on the same grounds four days after dismissing the lawsuit in Hong Kong, China, and asked the court to uphold its claim for compensation of 6.507 million yuan. It has slowed BYD's intention to list in Hong Kong and is seen as seriously shaking investor confidence. On November 2, BYD, which is actively preparing to spin off its electronic business such as mobile phone parts and go public independently, applied to the court to suspend the lawsuit, which was immediately strongly opposed by Foxconn.
In the face of Foxconn's fierce obstruction, in order to "escort" the spin-off and listing of BYD Electronics, BYD promised that the company intends to provide BYD International and BYD Electronics Co., Ltd. with a compensation guarantee for all liabilities, losses, damages, costs and expenses (if any) incurred, caused or related to BYD International due to litigation, and this guarantee "will only take effect after BYD International's listing".
On November 7, 2007, it had been a year and a half since the Shenzhen Intermediate Court accepted the cases of Foxconn and BYD, and although it had not yet given any explanation, with Foxconn's successive lawsuits in Hong Kong, China, the Shenzhen Intermediate People's Court finally made a substantive breakthrough.
On November 6, 2007, the Supreme People's Court appointed the Beijing Kyushu Island Shichu Intellectual Property Judicial Appraisal Center to conduct a judicial appraisal in Beijing for the "Foxconn v. BYD Malicious Infringement of Trade Secrets", which was based on the data of Liu Xiangjun, Si Shaoqing and others in the hard disk of BYD's office computer.
For this set of system documents, the two sides have different opinions. Foxconn claimed that the system file belonged to itself and was stolen by BYD; BYD said its documents were obtained from public sources. Therefore, whether this set of system documents is known or not becomes the core content of the identification.
According to Yu Chunhui, who served as the presiding judge of the case, this is the only case in China that was accepted by an intermediate people's court, but the Supreme Court entrusted an appraisal agency to conduct a judicial appraisal. On the same day, representatives of the Supreme People's Procuratorate, the Ministry of Public Security, the Taiwan Affairs Office of the State Council and the State Intellectual Property Office all attended the event.
As the listing date of BYD Electronics approaches, the two sides have also engaged in a "war of words". On December 7, 2007, BYD Electronics was publicly offered, with an offer price of HK$10.75-14 per share. In a meeting with Hong Kong media in a video conference the day before, Wang Chuanfu pointed out that "Foxconn's lawsuit against BYD's infringement of intellectual property rights is completely fabricated", while reiterating that "it is the behavior of competitors who are too afraid of our growth... I am very confident that I will win this case." Wang Chuanfu is not afraid of Foxconn, a few years ago Japan's Sanyo and Sony sued BYD separately, and finally still could not move BYD in the slightest.
For Wang Chuanfu's remarks, Foxconn hit back at the first time. Foxconn countered:
First of all, Foxconn pointed out that the Shenzhen Intermediate Court seized the contents of the computer hard disk used by Liu Xiangjun and Si Shaoqing (who were originally senior Foxconn managers) in BYD's office at BYD's office location, and found that the hard disk included a WORD version of the document with Foxconn's head, some documents had the logo and logo of Foxconn on it, and the signature of Foxconn's relevant supervisor below. Some letters and documents mainly contain "how to go to Foxconn to poach people". At present, the person involved in the case has been sentenced, there is no doubt about it. Why would BYD say that this case was "made out of nothing"?
Secondly, BYD promised before its listing that the Company intends to provide indemnity guarantees to BYD International and BYD Electronics Co., Ltd. for all liabilities, losses, damages, costs and expenses (if any) incurred, caused or related to BYD's litigation. If there is enough confidence to win the case, why is the shareholders' meeting required to make such a commitment?
Third, Goldman Sachs issued a notice saying that Foxconn proposed a huge compensation of 5 billion yuan to BYD, but BYD did not make any financial provision for the risk of losing the lawsuit. Integrity is the most basic principle to safeguard the interests of shareholders' rights and investors, and who will be liable for the huge risks that may be exposed to the shareholders who have contributed to BYD's upcoming listing and investors who are unaware of this insider? Where is BYD's integrity?
Therefore, Foxconn strongly calls for integrity to be the foundation of an enterprise, and hopes that BYD will not maliciously conceal the identification results in order to go public, so as not to mislead the investment public.
Although Foxconn tried its best to block it, BYD Electronics was successfully listed in Hong Kong, China on December 20, 2007. And the Forbes dispute did not stop because of the listing of BYD Electronics.
On January 10, 2008, after a judicial appraisal two months ago, a new development was made in the "Forbes case": the Supreme People's Court appointed the Beijing Kyushu Island Shichu Intellectual Property Judicial Appraisal Center to release the official appraisal report of the "Foxconn v. BYD Malicious Infringement of Trade Secrets". The appraisal report believes that the number of documents used by BYD are the same as those recorded in Foxconn's non-public documents. More than 60% of the documents provided by BYD in the lawsuit contain non-public statements; The seized hard drives contained more than 100 documents belonging to Foxconn, more than 55% of which contained unknown information. The two documents found in the hard drive that BYD was using were the same information as one of the plaintiffs' records in the non-public documents in the seized hard drive.
In this regard, BYD refuted that most of the appraisal report and related appendices were unilaterally submitted by Foxconn, and it had no knowledge of it. In addition, the determination of the confidential nature of the relevant information cannot be used as the basis for judging whether BYD has infringed.
On February 26, 2008, the "Forbes case" once again held a low-key trial in the Shenzhen Intermediate Court. The focus of the day was on the appraisal results of the Jiuzhou Island Intellectual Property Judicial Appraisal Center in Beijing more than a month ago. BYD believes that the identification result is unfair. BYD said that the number of documents involved in the computer hard disk sent by the Shenzhen Intermediate Court to the Beijing Kyushu Island Shichu Intellectual Property Judicial Appraisal Center for appraisal was 17 more than when it was transferred to Beijing for testing.
Therefore, BYD's legal counsel questioned the authenticity and whether the data in the hard disk could be used as evidence. They believe that the BYD hard drive, which is one of the important pieces of evidence that Foxconn identified BYD as stealing its trade secrets, is likely to have been tampered with. On this ground, BYD applied for verification, and the trial of the case also reached a deadlock.
In the face of Foxconn's full resistance, with the joint efforts of UBS and BYD, although the spin-off and listing of BYD Electronics was not as brilliant as expected, it was finally successful. This made Gou a little frustrated. So Foxconn sought to expand the "Forbes controversy".
On March 14, 2008, Foxconn issued an announcement stating that after investigating and collecting evidence, the local public security organs found that the case conducted in November 2007 may involve a crime and need to be investigated for criminal responsibility. Therefore, Foxconn withdrew the previous civil lawsuit against BYD for infringement of trade secrets, and applied for criminal prosecution in the Shenzhen court. A spokesman for Foxconn pointed out that there is a lot of evidence to prove that BYD's infringement of Foxconn's intellectual property rights was organized and planned. Therefore, based on the above understanding, it is somewhat inappropriate for Foxconn to conduct another civil lawsuit, so the company recently filed a new appeal.
Foxconn wants to elevate its accusation against BYD for infringement of trade secrets from a civil lawsuit to a criminal prosecution. Foxconn said in the announcement that after reviewing the existing evidence, the Bao'an Branch of the Shenzhen Municipal Public Security Bureau believed that there were criminal facts that needed to be investigated for criminal responsibility. The Public Security Bureau then filed a case for investigation into BYD's suspected criminal activities in accordance with the law. The announcement also said that BYD's directors and other employees, who are directly responsible, may be punished for criminal activities of any unit of BYD, and Wang Chuanfu is the most likely to be detained.
At this time, BYD Chairman Wang Chuanfu was in the United States for business talks, and the Shenzhen police are said to have given him an ultimatum, asking Wang Chuanfu to return to China by April 1 so that he can be questioned by the police at any time. People from Foxconn even analyzed that if Wang Chuanfu did not return to China within the time limit of the police, the Shenzhen police are likely to take compulsory measures to extradite Wang Chuanfu back to China, and by then, the fate of BYD Group and Wang Chuanfu may not be able to control themselves.
In the end, misfortune let Foxconn get the word right. On March 21, 2008, Xia Zuoquan, BYD's vice president and one of the founders, was taken away by the Shenzhen public security authorities to assist in the investigation. This sudden incident led the originally calm Forbe dispute to a gripping point. Foxconn is very excited, believing that it is a good opportunity for Foxconn to turn defeat into victory.
This is really shocking news, second only to the incident in which Gome Chairman Huang Guangyu was arrested by the Beijing Municipal Public Security Organs more than half a year later. Xia Zuoquan's arrest made BYD very embarrassed, but fortunately this news was not made public at the time, and it did not have any impact on BYD. And four days later, Xia Zuoquan was released.
Worried that this matter might become bigger, BYD decisively dealt with it. On April 7, BYD issued an announcement that Mr. Xia Zuoquan, vice president of BYD, had resigned on December 15, 2007 due to personal reasons. His resignation was approved on 20 March 2008 and he was re-designated from an Executive Director to a Non-executive Director with effect from 20 March. Obviously, BYD wants to temporarily distance himself from Xia Zuoquan's relationship with the company, in case others find the truth later.
But the news of Xia Zuoquan's arrest could not be concealed. On the evening of April 10, 2008, Foxconn issued an announcement proudly announcing that Xia Zuoquan, vice president and one of the founders of BYD, had been criminally detained by the Shenzhen public security organs.
At the same time, Foxconn announced the progress of another infringement-related case. The Public Security Bureau separately investigated former BYD employees Liu Xiangjun and Si Shaoqing in the case of infringement of Foxconn Technology Group's trade secrets. Two employees of Futaihong, a wholly-owned subsidiary of Foxconn, were hired by BYD as executives after their departures. Based on the investigation results of the Public Security Bureau, Liu Xiangjun and Si Shaoqing were charged by the Shenzhen Bao'an District People's Procuratorate and the Shenzhen Longgang District People's Procuratorate with the crime of infringing on the trade secrets of Foxconn Technology Group.
The Shenzhen Bao'an court found that Liu Xiangjun illegally obtained trade secrets belonging to Foxconn Technology Group by instructing Zhang Jian, a former employee of Hongfujin Precision Industry who was later employed by BYD, to obtain several documents of Foxconn Technology Group from Wang Wei, another former employee of Futaihong. Si Shaoqing also violated his confidentiality duty to Futaihong during his employment with Futaihong and brought out a number of files from Futaihong's premises for the compilation and formulation of similar files by BYD.
The Shenzhen Bao'an Court referred to the appraisal conclusions of the Intellectual Property Affairs Center of the Ministry of Science and Technology of the People's Republic of China on the documents obtained by Liu Xiangjun, and also referred to the appraisal conclusions of the Judicial Appraisal Center of Intellectual Property Rights of the Beginning of the Jiuzhou Island in Beijing from the documents in the seized hard disk obtained by Liu Xiangjun in the computer of BYD's office. After cross-examination in court, the Shenzhen Bao'an Court recognized the legality and reliability of the two appraisal conclusions, and accepted the conclusion that the documents to be evaluated contained non-public information and could bring economic benefits to those who possessed the information.
On March 31, 2008, Liu Xiangjun was convicted by the Bao'an District People's Court of Shenzhen for infringing on the trade secrets of Foxconn Technology Group and sentenced to four years in prison. On March 24, 2008, Si Shaoqing was convicted by the People's Court of Longgang District of Shenzhen Municipality for infringing on the trade secrets of Foxconn Technology Group, and the punishment included one year and four months in prison.
However, BYD believes that Xia Zuoquan was detained by the Shenzhen Public Security Bureau from March 21 to 24, 2008, only to assist in the investigation, and that Xia was released by the Shenzhen Public Security Bureau on March 24, 2008, due to lack of evidence. According to the advice of the PRC legal counsel, according to the relevant Chinese criminal procedure laws, a person will be detained for investigation before he is formally arrested by the Public Security Bureau in China, and that person will only be prosecuted by the Chinese procuratorate after formal arrest. In addition, Liu Xiangjun and Si Shaoqing, who were convicted by the Shenzhen Intermediate People's Court, are former employees of the company. His employment with the Company was terminated prior to his conviction and none of them were members of senior management during their employment with the Company. They are individuals convicted and therefore the group is not liable for their convictions. The directors of BYD believe that the business, operations or financial condition of the Group as a whole will not be materially adversely affected by any of the above events.
At the same time, BYD defended that during his tenure as BYD's executive director and vice president, Xia Zuoquan was responsible for the legal and review departments, computer center work, and supervised the general operation of the group, but never participated in daily business operations, production and sales divisions and research and development departments.
By the evening of December 2008, BYD, a Hong Kong-listed company in Hong Kong, issued an announcement disclosing the new developments in the Forbes case in the past six months. The progress announced by BYD includes the following three aspects, the original text is as follows:
1. Recently, the Company received the Decision to Withdraw the Case issued by the Public Security Bureau, and due to major changes in the evidence in the case, the Public Security Bureau withdrew the criminal investigation against the Company. Zhao Jun, Chen Yong and Liu Fuxing, the relevant persons in charge of the Jiuzhou Island Shichu Intellectual Property Judicial Appraisal Center in Beijing, who conducted the judicial appraisal of the case, have been arrested by the public security organs on suspicion of helping to destroy and falsify evidence and accept bribes.
2. Zhang Chaozheng, a former BYD employee, suspected of illegally accepting bribes from Foxconn and illegally stealing the company's confidential documents for Foxconn, has been arrested by the public security organs, and the procuratorate is charged and investigated for criminal responsibility.
3. Xia Zuoquan, a non-executive director of the Company, received the Decision to Release on Bail Pending Trial issued by the public security organ, pursuant to which the public security organ terminated all investigations against Mr. Xia based on major changes in the evidence in the case.
The three new developments announced by BYD have reversed the entire case. BYD can be called a Jedi counterattack. Previously, BYD had been the defendant in the case, and judging from the two-and-a-half-year confrontations between the two sides, BYD was almost always in a passive defensive situation. This time finally "took a bite" and gave Foxconn a dismount.
Throughout the Forbes case, the two sides had different views on whether some computer data seized by the public security organs from BYD constituted evidence. In January 2008, the Beijing Kyushu Island Shichu Intellectual Property Judicial Appraisal Center conducted an appraisal of the evidence. It is precisely because of this appraisal that the progress of the entire case has suddenly developed in the direction of not Libyan.
And BYD found a breakthrough here. Zhao Jun, Chen Yong and Liu Fuxing, the relevant persons in charge of the Jiuzhou Island Shichu Intellectual Property Judicial Appraisal Center in Beijing, who exposed the judicial appraisal of the case, are suspected of helping to destroy and forge evidence and accept bribes, and it is obviously Foxconn who paid the bribes.
As a result, the evidence has changed significantly, so the relevant departments have almost written off the investigation of BYD, including the withdrawal of BYD's criminal investigation and the termination of all investigations against Xia Zuoquan. By this time, the Forbe dispute, known as "China's first intellectual property case in the high-tech field", seems to be close to the end of the case.
Wang Chuanfu was once again invincible.