Taiwan reporter arrested in Hon Hai blackmail case

TAIPEI, Dec 18 (Reuters) Police in Taiwan said today they arrested a local journalist accused of blackmail by the chairman of Hon Hai , the island's largest electronics parts maker.

Tsang Chia-yi, a 32-year-old former Next Magazine reporter, and her male friend, Huang Shan-ping, 35, were taken into custody on Friday while allegedly trying to collect a million dollars payment sought from Hon Hai Precision Industry Chairman Terry Gou, a police statement said.

Local media reported that Next Magazine fired Tsang after her arrest and apologised to Gou in a statement.

The pair were released on bail over the weekend, an officer told Reuters, adding that police were in the process of sending evidence to prosecutors. Police declined comment on local media reports that Huang fled to Hong Kong yesterday.

Gou, one of Taiwan's richest businessmen, said in a statement Tsang had threatened via e-mail to publish a book about him and demanded million dollars to keep it under wraps.

''I found out that the contents in Ms Tsang's mail were largely distorting the facts, and it (could have) severely tarnished me and the company's reputation,'' Gou said.

Tsang told local media she did not blackmail Gou. She said he offered to pay the amount to buy the copyright of her book, and that she also had recorded conversations with Gou.

Gou, credited with building Taiwan's largest electronics manufacturer, Hon Hai and mobile handset maker Foxconn International Holding , has sued other reporters.

In September, Hon Hai sued a journalist in China for reporting that a manufacturing plant subsidiary had violated worker's rights by forcing them to work overtime for low pay. It later dropped most of the charges.

In April 2004, Hon Hai sued a journalist from Taiwan's Commercial Times for revealing the firm's confidential trade information.

REUTERS MS RN1347