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Abraham Peled admitted that he continued to employ Christopher Tarnovsky despite being made aware that he had posted information on the internet to let users unscramble Dish's network and receive free service.

"We made it clear that these people were turning over to the good side and are expected to fight piracy instead of engage in it and we trusted Mr Tarnovsky and instructed him not to do so," Peled said at a corporate spying trial in federal

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court in California. "Obviously, there's a theoretical risk (in hiring hackers)," he added.

The espionage case was brought by EchoStar Communications, which later split into two companies, Dish and EchoStar, with Dish being the primary plaintiff.

Dish claims it lost $900 million in revenue and system-repair costs due to the activities of Tarnovsky.

NDS, which provides security technology to News Corp's global satellite network, has denied sanctioning piracy, claiming it was merely aiming to make its own system more secure.

Tarnovsky was paid $128,000 in 2000 and at the end of the year received a $5,000 bonus "because he must have made a very good technical contribution," Peled testified.

An earlier trial exhibit showed that the Dish code appeared on the internet the same month Tarnovsky received his bonus.

Peled admitted that he was told in 2001 about Tarnovsky's alleged activities, despite the hacker not being fired until 2007, several months before the hacker faced a deposition in the lawsuit.