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Technology Stocks : American Superconductor (AMSC)
AMSC 1.420.0%Apr 17 8:10 PM EDTNews

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From: Doren9/26/2011 2:50:06 PM
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Chinese Turbine Firm Tied to Software Theft

online.wsj.com 

By REBECCA SMITH

A former employee of American Superconductor Corp. was convicted in Austria on criminal charges in a corporate espionage case linked to China's biggest manufacturer of wind turbines.

The conviction on charges of fraud and industrial espionage may buttress American Superconductor's allegations against its once-biggest customer, Sinovel Wind Group Co. Ltd.

The U.S. company contends that Sinovel was responsible for the theft of valuable software that controls turbines used to generate electricity from wind power. It has filed civil suits against Sinovel in Beijing.

Sinovel could not be reached on Friday but has previously denied the allegations.

Dejan Karabasevic, a 38-year-old Serbian engineer, admitted he stole the company's software, modified it and secretly furnished it to Sinovel.

The engineer was sentenced on Friday to three years in prison and ordered to pay of €200,000 ($270,000) to the American firm.

Gunter R. Huainigg, Mr. Karabasevic's attorney, said his client was unhappy with a job change and so furnished Sinovel with the software it wanted. He said Mr. Karabasevic entered into an employment contract with Sinovel that would have paid him $1.7 million over six years. Mr. Karabasevic cooperated with prosecutors in order to get a reduced sentence, he said.

Sinovel is no longer a customer of American Superconductor, which blamed the loss of the Chinese firm's business for the red ink it reported for its fiscal first quarter, which ended June 30. On Friday, the Devens, Mass., company reported a quarterly loss of $37.7 million, or 74 cents a share, compared with a gain of $9.2 million, or 20 cents a share, a year earlier. Revenues fell more than 90% to $9.1 million, from $97.2 million a year earlier.

American Superconductor had been selling Sinovel components and software that control the productivity and power quality of wind turbines, as well as licensing its turbine designs. It began to suspect something was awry when Sinovel earlier this year rejected a large shipment of control components, company officials said.
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