Top Menu

Siemens Stops Payment to BenQ in Taiwan

Following BenQ’s decision to cease German production of mobile telephones, Siemens has stopped payment of 117 million euros to BenQ’s Taiwanese parent company. Questions concerning patents also remain unresolved.

Siemens spokesperson Wolfram Trost said payment of 117 million euros (nearly $149 million) is now in a trust fund. Trost said that according to liquidators, it is unclear whether the payment should go to the BenQ parent company in Taiwan or to the German subsidiary BenQ Mobile.

An additional 50 million euros Siemens said was intended to pay BenQ for the German branches have been transferred directly to accounts controlled by the insolvency administrator.

Trost said Siemens became suspicious when, two weeks ago, negotiators for BenQ had requested that Siemens transfer at least 50 million in outstanding payments directly to the firm’s Taipeh headquarters, rather than to the Siemens BenQ subsidiary in Germany as originally planned.

The daily Süddeutsche Zeitung wrote that negotiators claimed the payment was necessary due to BenQ’s overall financial weakness.

Siemens apparently agreed to advance payment but not to transfer it to Taiwan.

We said “no”, said Trost.

Patent ownership raises expensive questions:

Questions as to who now holds right to some 600 patents since BenQ took over the mobile unit from Siemens AG in October 2005 also remain unresolved.

“It seems to be the case that all existing patents from the Siemens mobile telephone division were transferred to BenQ at the time of sale in September 2005,” BenQ spokesman Stefan Müller told the Berliner Zeitung on Thursday.

Industry experts have said finding another company to take over BenQ Mobile’s German production would be more difficult without rights to the patents.

“Without the licenses, there will be nothing else to do on Jan. 1, 2007 but turn off the lights,” said Matthias Jena, head of the trade union IG-Metall’s Bavarian office.

But BenQ Mobile’s insolvency administrator, Martin Prager, said he still needed to determine which company has the legal rights to 2,000 licenses and that patents transferred to the Taiwanese headquarters would not be the deciding factor in finding a company to take over production in Germany.

“The sheer amount (of patents) shows that we do have some space to negotiate,” he added.

“We tried everything”

Last week, BenQ Taiwan surprisingly announced that it would stop production and development in Germany and declare bankruptcy for the German subsidiary.

Earlier this week, Rick Lei, BenQ’s chief strategy officer, stressed that poor project management at BenQ Mobile forced BenQ to get rid of the handset business in Germany.

“Since acquiring Siemens’ handset unit, BenQ has lost 840 million euros ($1.06 billion),” he said. “We tried everything we could to turn around the losses, but failed.”

German chancellor Angela Merkel has said that the 3,000 jobs under threat following BenQ’s decision to cease production in Germany made it Siemens’ duty to help its former workers.

In a move widely seen as an exercise to limit damage to its image, Siemens chairman Klaus Kleinfeld told a newspaper last Sunday that the group was shelving plans to award a whopping 30-percent pay hike to management board members and would and re-direct the cash into a 30-million-euro ($38 million) financial hardship fund for BenQ’s German employees.

(from Deutsche Welle 05/10/2006)