A former key employee of the bankrupt chip manufacturer BelGaN in Oudenaarde (East Flanders) is in custody on suspicion of spying for China Francophone broadcaster RTBF and Flemish daily De Standaard have reported. The Federal Public Prosecutor’s Office has confirmed the news. The suspect is alleged to have passed on trade secrets concerning the production of so-called gallium nitride chips to a front company in China.
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Key player at bankrupt East Flemish chip manufacturer held for spying for China
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On 10 May, H.L. was detained at Brussels Airport just as he was about to fly back to the Chinese capital Beijing. The 52-year-old, who holds both Belgian and Chinese nationality, has been in custody ever since.
The allegations against him are serious: espionage, participation in a criminal organisation, misuse of company assets, and the unlawful disclosure of trade secrets.
The story begins with the bankruptcy of BelGaN in the summer of 2024. “New investors were sought. Various avenues were explored, but unfortunately without success,” was what was said at the time. 440 employees of the once-thriving chip company found themselves out of work.
However, the bankruptcy aroused suspicion and an investigation was launched. BelGaN had been taken over by Chinese investors a few years earlier. Investigators suspect that their aim was not to get the company back on track, but to get hold of its trade secrets.
A long track record
The site in Oudenaarde was established over 40 years ago and called MIETEC. It went on to become a flagship of Flemish technology. The company – the last industrial chip manufacturer in Belgium – specialised primarily in innovative gallium nitride chips. This technology is mainly used in electric vehicles, aerospace and the military sector.
When the company ran into financial difficulties, in February 2022 it was taken over by a consortium of Chinese investors. BelGaN’s new CEO, Alan Zhou Zhen, announced that he “saw an opportunity to launch a GaN valley in Europe”.
A few months after the takeover, Gankool was established in the Chinese province of Fujian. It is a company producing exactly the same technology as BelGaN. Gankool was financed by a Chinese investment fund.
Suspect, H.L., held a “senior research position” at BelGaN and is therefore believed to have held a senior position at the Chinese company as well.
Investigators suspect that H.L. therefore transferred BelGaN’s knowledge and know-how to Gankool. “The investigation may point to the unlawful transfer of specialised intellectual property and trade secrets relating to the production of gallium nitride chips abroad.”
“There are indications that the individual in question, who held a senior research position, was simultaneously serving as a director of a Chinese company engaged in a similar manufacturing activity,” the Belgian public prosecutor’s office says.
Investigators are also still searching for a second suspect in this case. According to the RTBF and De Standaard, that person is former CEO Alan Zhen Zhou.
The tactics of ‘front companies’
The Belgian intelligence services are familiar with the tactics of using so-called front companies to achieve industrial espionage. The latest annual report from the Belgian State Security Service explicitly warns against this.
“China realises that in some very specific areas it still lags behind Europe and the US in terms of technology. Closing that gap – and building a strategic lead – is the absolute top priority for the Chinese regime,” the report states.
One way of doing this is through ‘mirror companies’. “Chinese companies invest in Belgian companies, research centres or spin-offs, preferably in smaller entities that are developing promising technologies but are struggling with insufficient funding. In this way, they gain access to a particular technology. They then set up a mirror company in China that will produce the same technology on a larger scale. The parent company is subsequently sold off again, if possible, at a profit.”