Taiwanese Tycoon Questions Buffet Bet on Batterymaker
A Taiwanese business tycoon has criticized U.S. investor Warren Buffett’s decision to invest in a Chinese battery and car maker facing a lawsuit accusing it of stealing trade secrets.
Officials with Buffett’s company, Berkshire Hathaway Inc., said they believe the allegations against China’s BYD Company Ltd. are unfounded.
In an interview with a Taiwanese newspaper published Monday, Terry Gou, head of Taiwanese electronics giant Hon Hai Precision Industry Co. Ltd., questioned the American investor’s decision to invest in the batterymaker BYD, which Hon Hai has sued for intellectual property violations.
“Didn’t Buffett proclaim that he would only invest in companies that are trustworthy?” Gou was quoted as telling the Chinese-language Economic Daily News. “Then why did he invest in BYD which stole commercial secrets from (Hon Hai affiliate) Foxconn.”
In June 2006, Hon Hai took BYD to court in Shenzhen, China, saying BYD stole commercial secrets from Foxconn. The Taiwanese company has complained that the mainland court is dragging its feet in the BYD case.
A Hon Hai official confirmed the contents of the Gou interview. He spoke on condition of anonymity because he is not permitted to deal with the press.
BYD spokeswoman Jasmine Huang rejected Gou’s claims.
“This is the malicious attack of a rival,” she said. “For the time being we will ignore it.”
Last September, BYD gained the support of MidAmerican Energy Holdings Co., the utility division of Omaha, Neb.-based Berkshire, which took a 9.9 percent stake in the Hong Kong-traded company. The stake was valued at $230 million.
Buffett and Berkshire’s Vice Chairman Charlie Munger were asked about the allegations against BYD at a news conference on Sunday, and Buffett deferred to Munger because he initiated Berkshire’s investment in BYD and knows the Chinese company well.
Munger said the allegations Foxconn made against BYD have already been litigated in a Japanese court.
“That set of claims, in my view, has been totally discredited,” he said. “I don’t have any ethical concerns about BYD.”
An Associated Press call Monday to a Berkshire spokeswoman was not immediately returned.
Hon Hai is the world’s leading contract electronics manufacturer. It provides components for popular consumer electronics brands, including Apple Inc.‘s iPhone.
In the interview, Gou said BYD hired more than 400 Foxconn employees and “stole more than 10,000 documents” from the Taiwanese company.
“They sent spies to steal documents from us and later destroyed the evidence,” he was quoted as saying.
BYD, which stands for Build Your Dreams, has now expanded to the field of electric cars, and the manufacture of cell phones and related components. Its cell phone business took off after Nokia Corp. and Motorola Inc. reportedly switched their orders to it from Foxconn.
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AP Business Writer Josh Funk contributed to this report from Omaha, Neb.
5/4/2009 10:55 AM ANNIE HUANG Associated Press Writer TAIPEI, Taiwan