It looks like OnePlus founder Pete Lau is in a spot of trouble as Taiwanese law enforcement officials have issued an arrest warrant for him. Together with two other executives, Lau has been accused of illegally hiring employees in Taiwan .

Arrest warrant issued for OnePlus founder

According to the Shilin District Prosecutors Office, they claim that OnePlus had set up a shell company based in Hong Kong under the “OnePlus” name back in 2014. They then registered a Taiwan branch in 2015, with the names eventually changing from “OnePlus” to “Sonar.”

The prosecutors are also alleging that between August 2015 and January 2021, OnePlus funneled more than NT$2.3 billion (~US$72.93 million) to its Taiwan branch through a Hong Kong trading company. That money was then used to hire staff in Taiwan, pay salaries, and purchase equipment. According to witnesses, the software developed in the Taiwan branch was then used in both OnePlus and OPPO phones (both are under the same BBK parent company).

As a result, two Taiwanese citizens who worked for Lau have been indicted. The Shilin District Prosecutors Office also issued an arrest warrant for the OnePlus founder . One of the executives, surnamed Lin claimed he was appointed by Lau as R&D director. He was responsible for interviewing and leading the team. He also said that all operational decisions were made by Lau.

The other individual, surnamed Cheng claimed to be a nominal legal representative who handled tax planning. She claimed to have no knowledge about the company’s operations and did not receive a salary.

But why is this a problem?

Now, setting up shop in multiple countries and hiring local staff generally isn’t a problem. We see many companies do that all over the world. Google, Apple, Microsoft, you name it. However, in this instance, it’s a bit trickier.

This is due to the current relationship between China and Taiwan . This comes in the form of the Cross-Strait Act , which helps serve as a guide for relations between both countries. Part of the act’s provisions include Chinese companies obtaining permission from the Taiwanese government when hiring locally.

In this case, it appears that OnePlus failed to get the necessary approval, with prosecutors concluding that Lau along with Cheng and Lin had violated the act in the process.