Kaohsiung: The head of a Taiwanese technology company has been detained on suspicion of violating the National Security Act by using Chinese-made components in drones supplied under a military procurement contract, the Ciaotou District Prosecutors Office said Tuesday.

According to Focus Taiwan, the ROC Army's 8th Field Army identified the potential use of Chinese components during a contract review and acceptance inspection of the drones. The drones were supplied by an unnamed tech company that was awarded a NT$2.95 million (US$92,558) tender from the 8th Field Army last year for a training drone procurement project.

Prosecutors revealed that the company head, surnamed Chang, and a technical supervisor surnamed Lo from another unnamed technology company allegedly assembled the drones in Taiwan using Chinese-packaged drone chips, Chinese-made flight control boards, and other components. They reportedly concealed product labels and submitted false certificates of origin to deceive military inspectors into believing the drones met the tender requirements, which banned the use of components from China, Hong Kong, and Macau.

Investigators conducted searches at the two companies on Aug. 11, seizing evidence and questioning suspects and witnesses. Following the questioning, prosecutors sought the detention of Chang and Lo on suspicion of violating the National Security Act by supplying products manufactured in China, as well as attempted fraud under the Criminal Code.

A court approved Chang's detention and ordered that he be held incommunicado, while Lo was released without bail. Prosecutors noted that this case is the first involving alleged National Security Act violations linked to a military drone procurement project.

Taiwan's military stated that payment has been withheld from Chang's company, and it plans to bar the contractor from future government tenders, terminate the contract, and seek damages for breach of contract.