A number of Huawei executives have been arrested following an allegation that they have divulged confidential information to Chinese technology company LeEco.
The arrested officials are reportedly production designers of Huawei. It has been also said that these officials were not employed with the company at the time of their arrest.
However, the information that was leaked to LeEco is yet to be disclosed. According to reports, six executives have been detained in relation to a patent infringement.
LeEco And Huawei
LeEco founded by Jia Yueting, is a Chinese company which mostly deals with automobiles, electric bicycles, mobiles phones, VR, TV, and film production.
Since December 2016, LeEco has been trying to get a foothold in the United States by selling smartphones at affordable prices.
Huawei, on the other hand, was established in 1987 by Ren Zhengfei. The world's third largest smartphone maker has its headquarters in Shenzhen, China, and is well-known in the tech world especially when compared with LeEco.
Reports suggest that Shenzhen-based Huawei has a strong rivalry with other companies like Oppo Electronics Corp. and Coolpad Group Ltd. A new player like LeEco — which is attempting to make inroads into the U.S. market — has no other option but to lure executives from reputable companies like Huawei.
"For any new player which wants to scale up rapidly, such as LeEco, it has no other choice but to poach experienced talent from established companies," says Xiang Ligang, the CEO of cctime.com, a telecoms industry website.
Xiang, who's a smartphone expert, added that these things suggest that China has the most competitive smartphone market in the world with a large number of vendors fighting to grab the market.
Allegations
Reports suggest that the six executives who have been arrested were revealing commercial secrets to Coolpad Group and its largest shareholder LeEco.
It was also reported that some of the executives have already left Huawei to join the other two companies. Although LeEco reportedly denied getting any information from the detained executives, Huawei harped on the point by saying that LeEco had in its possession two technological patents: an antenna design and a children's smartwatch which originally belongs to Huawei.
Huawei is already an established player in the smartphone market, it has shipped about 139 million handsets in 2016 as revealed by the International Data Corp. Threatened by its growth, competitors are trying to lure many of its top executives by offering high salary packages.
The former president of Huawei Honor, Liu Jiangfeng, joined the Coolpad Group in August 2016. Xu Xinquan, who used to be the president of Huawei's e-commerce business, left the company in 2016 to join LeEco as well.
