Trust Betrayed by the Wind: AMSC and Synovell's Chain of Collapse (2008-2011)

Trust Betrayed by the Wind: AMSC and Synovell's Chain of Collapse (2008-2011)

From 2008 to 2011, AMSC, an advanced technology company in the U.S., had a close working relationship with Sinovel, one of China's largest customers in the wind power sector. However, the relationship was dramatically disrupted by the betrayal of one of its engineers. Dejan Karabasevic, a Serbian engineer working for Windtec, an AMSC subsidiary in Austria, illegally copied and provided AMSC's confidential software at Sinovel's request in exchange for compensation and position. He said during his interrogation that he cooperated with a partner who valued him fairly, indicating that personal dissatisfaction and financial inducement were behind the crime.

Sinovel terminated its contract with AMSC based on the technology and continued to develop its own products using the illegally obtained software, and in March 2011, AMSC was shaken to its foundations when it suddenly canceled all orders. The stock price fell 42% overnight, and the final loss amounted to approximately $800 million. Numerous employees were laid off, and the company was on the verge of collapse.

In addition, Sinovel spread posts on social networking sites claiming that the company was the result of "proprietary development" and cleverly manipulated information to give the impression that AMSC was the "loser" in the contract dispute. Karabasevich was convicted in Austria, but the pursuit of responsibility against the Chinese officials has not been realized. This case is a modern tragedy that confronts the fragility of intellectual property in a globalized technological society and the dangers of information warfare in the age of social networking.