IR Files Lawsuit Against Former CEO, Alleges Theft Of Trade Secrets & Racketeering
Media sources are reporting that International Rectifier Corp. has sued its former CEO, Alex Lidow (the son of the company’s founder Eric Lidow), accusing him of stealing information, intellectual property and technology related to IR’s $60 million research program on gallium nitride power devices, which he oversaw as head of the R&D team. The case was filed Sept. 8 in the California Central District Court, Los Angeles office, and a hearing is scheduled for February 2nd. The lawsuit alleges that Alex Lidow engaged in an ongoing criminal enterprise, as well as violating the RICO (racketeer-influenced and corrupt organization) law.
Alex Lidow resigned in October 2007 after accounting irregularities had been discovered the previous April. The accounting irregularities included premature revenue recognition of product sales at a Japanese subsidiary and other issues, and cost the company about $117 million, forcing it to restate two years of earnings, according to an IR-appointed independent audit committee.
Alex Lidow is now affiliated with Efficient Power Conversion Corp. (EPCC) and is listed as the company’s CEO. As well as Lidow and EPCC, fellow defendants include six former IR staff (Robert Beach, JianJuan ’Joe’ Cao, David Tam, Alana Nakata, Stephen Tsang, and Guangyuang Zhao), as well as gallium nitride-based processing service provider GNOEM Systems Inc. (founded by Beach in 2004), process equipment maker Hermes-Epitek Corp. and silicon wafer supplier EPISIL Technologies Inc. (both of Taiwan), and MOCVD reactor supplier Aixtron AG.
IR claims that Lidow stalled IR from making its GaN technology public in 2007, and instead began secretly recruiting the above referenced IR staff (from the R&D team plus senior sales representatives) for his plan to establish a new firm – EPCC, supposedly to provide rival GaN-based products.
Legal representation for Lidow and EPCC claim that the defendants are not using IR’s GaN technology, and that EPCC is developing a different semiconductor product. They are also asking for the RICO allegations to be dropped, as well as for the dismissal of the case.
