Sinovel Wind Group Co, China's third-biggest maker of wind turbines, will divest four foreign units, including in the US, where the company and two senior executives have been indicted on charges of stealing trade secrets.

Sinovel disclosed the termination of the overseas branches in a statement filed on Monday with the Shanghai Stock Exchange, saying its seven-member board of directors had approved the plan. Besides the US, the locations are in Canada, Belgium and Italy. The company provided no further details.

On Thursday, a federal grand jury in Wisconsin decided prosecutors had presented enough evidence to charge Beijing-based Sinovel, along with executives Su Liying and Zhao Haichun, with stealing the software source code for turbine controllers made by American Superconductor Corp, a former supplier. Su and Zhao, respectively, are deputy director of research and development and a technology manager for Sinovel.

Also charged was Dejan Karabasevic, a Serbian national who, as an employee of AMSC's subsidiary in Austria, was allegedly recruited to secretly copy the software code from AMSC computers, costing the company $800 million in intellectual-property losses, according to the US Justice Department.

Sinovel then retrofitted the stolen software into wind turbines it had previously manufactured for sale and installation in Massachusetts, where AMSC is based.

AMSC CEO Daniel McGahn said his company had worked with US authorities to verify that certain turbines produced by Sinovel contained AMSC's intellectual property. AMSC called on Congress and President Barack Obama's administration to "re-evaluate the US trade relationship with China" in light of the indictment.

AMSC and Sinovel began working together in 2005, with the US company providing services in wind-turbine design along with turbine-control software. Five years later, Sinovel, with AMSC inputs, was producing thousands of turbines annually and for a time was China's biggest, and the world's number two, turbine maker.

In March 2011, the Chinese company refused shipments from AMSC, breaching contracts. In June of that year, according to AMSC, its employees discovered that Sinovel had gained access to and was using stolen AMSC trade secrets and intellectual property that Karabasevic had supplied. In September, the former engineer for AMSC Windtec GmbH pleaded guilty in an Austrian court and was sentenced to a year in prison and two years' probation. He also was ordered to pay his ex-employer $270,000 in damages.

The case has involved numerous claims and counterclaims between the companies, some of which have been wending their way through the Chinese legal system but have yet to be resolved.

josephboris@chinadailyusa.com

(China Daily USA 07/02/2013 page2)