Want China Times, Staff Reporter 2013-01-10
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| Police vehicles enter Foxconn's Taiyuan plant in Shanxi province after an incident last year. (Photo/CNS) |
Taiwan-based
Foxconn, the world's largest electronics contract manufacturer, has admitted
that the company is currently conducting an internal investigation into
allegations that senior executives took bribes from suppliers in China and
confirmed that it is cooperating with police on both sides of the Taiwan
Strait.
The
electronics giant, best known for making Apple's iPhones and iPads in China,
released a statement on Wednesday in response to a report in Taiwan's Next
Magazine, which first broke the story, denying "most" of the
allegations in the magazine article but without providing specifics. The
statement added that Terry Gou, the founder and chairman of Foxconn and its
parent company Hon Hai, has instructed the group to identify and pursue all
those involved in bribery activities and to evaluate internal controls to
prevent the same from happening in the future.
Next
claimed that Teng Chih-hsien, a manager with Foxconn's surface-mount technology
department, was arrested by authorities in Shenzhen four months ago. Teng's
department is authorized to sign lucrative contracts for equipment used by the
company's various business groups and allegedly took bribes in exchange for
supply contracts over an extended period of time. More than 40 suppliers have
been linked to the scandal, which involves contracts worth billions of dollars,
the article said.
Teng is far
from the only senior executive suspected, and his arrest has sent more than a
dozen others fleeing back to Taiwan, including retired former SMT department
deputy general manager Liao Wan-cheng, the magazine added.
It was Gou,
who has reportedly known about the allegations since July or August last year,
who insisted that the case be handled strictly in accordance with the law,
according to Next. Sources told the magazine that when he was informed of the
issue by a Foxconn manager in charge of ethics and business violations, an
infuriated Gou demanded that the perpetrators be sacked after coughing up the
funds. Unlike most other Taiwanese companies in China facing bribery
accusations, however, Gou had no intention of keeping the problem in-house and
immediately reported it to mainland authorities.
Foxconn
says that a preliminary internal probe has found that only the company's
procurement executives were involved and that upper management is not under
suspicion.
Under
China's laws, non-Chinese nationals can be sentenced to a maximum of five years
imprisonment for accepting bribes, while the maximum penalty for bribing
another party is 10 years imprisonment.
Foxconn has
already reportedly cut ties with testing automation equipment supplier TRI
Innovation over the bribing allegations, although a spokesperson for the
Taiwan-based supplier denied losing a major client and said that the company
does not comment on specific customers.
Foxconn's
statement on Wednesday also said that its supply chain involving Taiwanese
businesses in China, its personnel in China, and its business development are
normal and have not been affected by the allegations.
References:
Terry Gou 郭台銘
Teng
Chih-hsien 鄧志賢
Liao Wan-cheng 廖萬成
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