) in 2003 for intellectual-property violations, Chinese networking company Huawei Technologies has been trying to repair its reputation. That may be difficult. BusinessWeek has obtained a July 21 letter from the general counsel of Fujitsu Network Communications to Huawei CEO Ren Zhengfei, claiming that a Huawei employee was caught trying to filch information on rivals' products at a recent trade show in Chicago.
According to the letter, Yi Bin Zhu was discovered after hours in Fujitsu's booth removing the casing from a $1 million piece of networking gear and taking photos of the circuit boards inside. A security guard confiscated the photo card in Zhu's digital camera, along with a notebook containing notes and diagrams of other suppliers' gear. AT&T (T
), Cisco, Lucent (LU
), Nortel (NRTL
), and Tellabs got the letter, suggesting Zhu may have had information on some of their products as well. Zhu was wearing a badge saying he worked for "Weihua," the letter says. But a source says he had a Huawei business card.
Fujitsu gave the photo card and notebook to the FBI. "The only logical conclusion that one can draw is that the employee in question was engaged in unlawful activities that may have been a violation of the Economic Espionage Act of 1996," says the letter from Melanie Scofield, the Fujitsu unit's chief legal counsel.
Scofield couldn't be reached for comment, but a Fujitsu source says it will not press charges. The FBI declined comment. Other companies say they have not heard from the Feds. Coincidentally, on July 28 Cisco dropped its lawsuit because Huawei passed a review to prove it had cleaned up its act.
Huawei says the FBI has not gotten in touch. It calls the incident "an unfortunate misunderstanding" and is trying to determine if disciplinary action is needed. Zhu is still working, but with reduced pay. After Ronald Reagan's death on June 5, at least eight bills were introduced in Congress -- to put him on the $20 bill, to attach his name to various buildings, and even to create a new public holiday. But widow Nancy Reagan's request that people donate to the largest Alzheimer's charity has yet to generate many donations. Such an appeal usually swells coffers, but the Alzheimer's Assn. in Chicago hasn't seen a spike. It expects to raise $52 million in 2004 -- level with last year. Yet the charity says it won't trumpet Reagan's plea. "We don't want to exploit our close relationship with the family," says spokesperson Kathryn Kane. The former First Lady declined comment.
Congress could help: A recent bill would double the National Institutes of Health's Alzheimer's budget, to $1.4 billion. But rising deficits could make that impossible. Plus, some pols are leery of Alzheimer's -- and any related stem-cell debates. A spokesperson for Representative Dana Rohrabacher (R-Calif.), who sponsored the $20 measure, says: "Putting his image on a $20 bill is much less controversial." But a lot less helpful to Alzheimer's patients. How quickly a life can unravel. A year ago, Amr Mohsen was a respected Silicon Valley executive living in a Los Gatos (Calif.) mansion. Now he's in jail -- and accused of taking a hit out on a judge.
Mohsen's woes started in 1998, when the then-CEO of software company Aptix allegedly tried to doctor documents to win a civil patent suit, later dismissed. But during the trial he allegedly committed perjury, which he denies. Federal District Judge William Alsup referred the case to the Feds. Alsup then decided to hear the resulting criminal case, over Mohsen's objections. In March, Mohsen tried to flee the country but was arrested (BW -- Apr. 19).
He has been in jail since, but may have found ways to dig his hole even deeper. According to an FBI affidavit, even though he was warned his calls would be recorded, Mohsen called his daughter -- a psychology student -- to find out what constitutes insanity, just before claiming he was incompetent to stand trial. In May, the affidavit says, Mohsen asked an inmate to make threatening calls to five witnesses and to hire someone to burn down another one's home. Days later, as a video camera rolled, he asked the inmate to have Alsup killed. Told it would cost $25,000, he said: "That's very high...I heard it's more like $10,000." Mohsen's lawyer did not return calls. Microsoft's $3-per-share, one-time dividend could give a nice kick to the Seattle economy. Excluding execs, Microsoft employees -- current and former -- living nearby own 1.2% of the stock and will get $384 million from the payout, estimates economist Dick Conway. Of course, bigwigs will see the most from the dividends, expected to be paid on Dec. 2. In addition to Bill Gates and Steve Ballmer, who own nearly 15% of the company, Group Vice-President Jeffrey Raikes will net $25 mil-lion. Board member Jon Shirley, who was president from 1983 to 1990, gets $7.6 million. With a little trickle-down, it'll be a nice Christmas gift for Seattle businesses. Last year's $1.3 billion settlement mandated that 10 Wall Street firms must provide investors with outside opinions on their stock advice. Now, some firms that weren't slapped by regulators seem to view such reports as a competitive threat.
Fidelity Investments will soon add research from seven new independent firms, such as Ford Equity Research, Thomas White International, and Callard Research. That gets Fidelity up to par with its admonished rivals. Marc Benioff revels in media attention. But he's smarting from the turn it took on July 21. The loquacious CEO of Salesforce.com had just come off a months-long "quiet period" from his company's initial public offering. In June, the maker of customer-management software had one of the strongest IPOs of the year, with its stock rising 56% on the first day, to $17.
The ban off, Salesforce told analysts and press it had set a sales target of $160 million to $165 million for this fiscal year, ended Jan. 31, up from $96 million last year. Within hours, the stock plunged 27%, to $11, zapping $120 million from Benioff's stake.
What happened? News reports noted that the target missed analysts' forecasts, and investors panicked. But those reports were prepared without company guidance. The stock has recovered a bit, to $13. "We're in the limelight all the time," Benioff says. "The downside is that there's a level of disbelief at how well we're doing." Now Benioff has to win back investors' trust. When Lance Armstrong crossed the finish line to clinch a record sixth Tour de France victory on July 25, no one applauded more loudly than execs at Shimano. That's because Armstrong rode a bike that was powered by Shimano pedals and cranks, shifted with Shimano derailleurs, and slowed (only occasionally, of course) by Shimano brakes. In the past two decades the Japanese company has become the dominant supplier of parts for higher-end models. "They're the Intel of the bike business," says John Burke, president of Trek Bicycle.
The key to Shimano's success is its commitment to research. Every year, the $1.3 billion company dispatches more than a dozen employees to work with manufacturers and retailers for several months at a stretch to gauge consumer trends. And company officials regularly meet with top racers such as Armstrong to discuss products and prototypes.
Still, Shimano can hardly afford to coast. Even as two-wheelers enjoy increasing favor in the U.S. because of Armstrong's success in the Tour, the long-term trend is down. And as more bikes are built in China, parts makers have popped up to supply mainland manufacturers. Most are small now, but they could become formidable rivals if they can bring their quality up. So Shimano is shifting production to China to stay cost competitive; it opened its second factory there in April. For now, though, Shimano rules high-end bike components just as surely as Armstrong dominated this year's Tour de Lance.