SHANGHAI Police raided the offices of Taiwan's BenQ Corp. Wednesday, leading to the arrest of two senior executives in relation to irregularities over bonuses paid to overseas employees.
Finance managers Alex Liou and Billy Liou were released on combined bail of approximately $215,000. BenQ Senior Vice President Eric KY Yu was held in custody for questioning by police investigators and prosecutors.
Yu, who is also BenQ's spokesman, said, "We have provided relevant documents to the investigative authorities, and we will fully cooperate with any investigation."
BenQ is one of Taiwan's largest name-brand companies. In recent years, it has launched a major campaign to burnish its image worldwide and promote its brand. It is among only a few Taiwanese companies to do so.
The recent failure to turn around the Siemens handset unit it bought in 2005 has been a major blow to that image, and yesterday's raid added more unwanted problems.
"The allegations do not reflect well in terms of corporate governance and the longer-term strategy of the company remains unclear amid risks associated with the recent insolvency of BenQ Mobile's German operations," said Dominic Grant, a Taipei-based analyst for Macquarie Research.
Despite those concerns, Grant said he still remained optimistic about the company's future.