China convicts Foxconn employees on iPad 2 leak

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June 16, 2011 11:03 AM EST

China has convicted three people accused of conspiring to steal the casing design of iPad 2 last year, according to reports, which also said that two of those found guilty were previously connected with Foxconn, the Taiwanese manufacturer of Apple's gadget product lines.

The Wall Street Journal reported on Thursday that the Shenzhen Bao'an People's Court has determined that Xiao Chengsong, head of Shenzhen MacTop Electronics, lured Hou Pengna and Lin Kecheng of Hon Hai Precision Industry into providing him the cover shell that will be used by Apple for iPad 2, which was then slated for release on February 2011.

In a decision published online, the Shenzhen court said that the two former employees of Hon Hai, more popularly known as Foxconn, turned over to Xiao digital images of iPad 2's protective casing on September last year in exchange for $3000 and discounts on MacTop products.

By December 2010, listings of iPad 2 coverings appeared on the China-based online wholesale site Alibaba, which were shortly deleted following formal complaints received by the company, according to Alibaba officials.

At that time, Alibaba said the postings for the iPad 2 casings originated from a number of firms but the site failed to mention if MacTop were one of those which offered the product.

According to the decision, the Shenzhen court slapped Xiao with up to 18 months of jail term and ordered to pay 150,000 yuan while Lin was punished with 14 months of imprisonment and fine of 100,000 yuan.

For acting as the broker of the illegal deal, the court sent Hou to prison for 12 months and was made to pay 30,000 yuan.

The court decision declared that "all three people have infringed trade secrets," as it singled out Lin, who "has violated the privacy policy of the company and provided trade secrets to others."

In a statement, Hon Hai declined to comment on the reported conviction of its former workers but the Taiwanese firm, which operates its sprawling facility in mainland China, maintained that "Foxconn takes its commitment to protecting its intellectual property as well as that of its customers very seriously and undertakes all appropriate actions to safeguard against any violations."

As of press time, Apple has yet to issue its comments on the development, which is one of the controversies that hounded its Chinese partners in the past two years that were also marred by numerous instances of workplace suicides and allegations of oppressive working conditions.

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