2 Taiwanese executives arrested over mainland components in military drones

The companies allegedly submitted false certificates of origin when the drones were presented to the military for inspection, according to the Taoyuan District Prosecutors Office.

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Jiin Ming vice-chairman Chien Hao-ting and business manager Chen Yang-cheng were arrested after prosecutors searched multiple locations on October 8. A court ordered the two detained for two months and held incommunicado on “suspicion of violating the National Security Act and committing offences including document forgery and aggravated fraud”.

Jiin Ming, a hardware manufacturer which started making drones several years ago, said it would cooperate with the investigation and had activated contingency measures, with chairman Tsai Hsiang-feng temporarily assuming Chien’s duties.

Taiwanese Defence Minister Wellington Koo Li-hsiung said on Tuesday that the suspected irregularities involved small-value purchases of Jiin Ming drones by individual military units rather than larger procurement programmes.

He acknowledged that such purchases – sometimes involving only two or four drones – had not previously been subjected to more detailed inspections in which units are dismantled.

Koo said the ministry would now require even small batches to be dismantled and inspected to prevent prohibited “red” components from being concealed inside the aircraft.

“We will enforce this strictly,” he said.

The opposition Taiwan People’s Party said the case exposed weaknesses in the government’s efforts at boosting supply chain security.

It also questioned Jiin Ming’s links with companies that it described as being close to the ruling Democratic Progressive Party (DPP) and accused the government of failing to adequately scrutinise military contractors.

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“Jiin Ming was selected as a member of the national drone team, but was found to have allegedly used mainland Chinese-made components. Does no one in the DPP government need to take responsibility?” TPP chairman Huang Kuo-chang said on Tuesday.

The controversy comes two months after Taiwan’s first case of a military drone supplier being investigated for suspected violations of the island’s security law and attempted fraud.

In August, Hang Jian Technology was accused of using mainland Chinese-packaged chips and mainland-made flight-control boards in drones supplied to the island’s Eighth Army Corps.

The company won a NT$2.9 million (US$92,000) contract to supply 180 drones. The army discovered the suspected mainland components during acceptance inspections, withheld payment and referred the case to prosecutors.

Company head Chang Tung-lin was subsequently detained and held incommunicado. Prosecutors described it as “the first military drone procurement case involving suspected violations of the National Security Act”.

Legislator Ma Wen-chun, from the opposition Kuomintang party, said after the August case that Hang Jian had faced controversies over mainland Chinese components and origin labelling as early as 2019 and 2020 but had continued to receive government contracts and subsidies.

She said scrutiny needed to extend beyond major contractors to the entire supply chain, including chips, flight-control systems, communications modules and lower-tier suppliers.

“If contracts repeatedly stipulate that mainland Chinese-made components are prohibited, but violations are still only discovered during acceptance inspections after delivery, what exactly has all that vetting prevented?” Ma said.

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The defence ministry later said the Eighth Army Corps had withheld payment after discovering the suspected mainland components and was taking steps to suspend the supplier from government procurement, terminate the contract and pursue liability for breach of contract.

Analysts warned that the risks went beyond procurement compliance, with mainland Chinese electronics potentially creating operational and information-security vulnerabilities.

“If Chinese electronics or related equipment are used, is it possible that this electromagnetic spectrum information could be obtained by the Communist Party more quickly?” said Lin Ying-yu, a strategic studies professor at Tamkang University in New Taipei City.

“I think that would certainly pose a major threat to our drone operations.”

Beijing regards Taiwan as part of China to be reunited by force if necessary. Most countries, including the United States, do not recognise self-ruled Taiwan as an independent state, but Washington is opposed to any unilateral change to the cross-strait status quo by force and is committed to supplying it with weapons.