(Yicai Global) Feb. 26 -- Wanglong Group, the world’s third-largest producer of the flavoring vanillin, will pay CNY160 million (USD24.7 million) to rival Zhonghua Chemical for the misappropriation of trade secrets in the highest amount of compensation ever paid by a Chinese business, the Legal Daily reported today, citing the court ruling.

Ningbo-based Wanglong has been found guilty of stealing technical secrets from an employee of Zhonghua Chemical, the biggest vanillin manufacturer in the world, in 2010 to make an aroma chemical widely used in foods and cosmetics. Wanglong went on to produce 2,000 tons of the chemical a year and took up a 10 percent slice of the global market, eating up a huge share of Zhonghua Chemical’s original 60 percent share.

The intellectual property infringement is very serious and has had severe consequences, the Supreme People's Court said, adding that it will transfer documents to the public security department as it may constitute a criminal offence.

Jiaxing, eastern Zhejiang province-based Zhonghua Chemical filed the lawsuit in 2018, asking for CNY502 million in compensation. Zhonghua Chemical can appeal for more reimbursement, as it only asked for damages until the end of 2017, the court added.

Editor: Kim Taylor