Foxconn Accused Of Taking Bribes For Contracts

Max 'Beast from the East' Smolaks covers open source, public sector, startups and technology of the future at TechWeekEurope. If you find him looking lost on the streets of London, feed him coffee and sugar.

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Police reportedly arrested one manager, with several still under investigation

Foxconn, the world’s largest electronics contract manufacturer by revenue, is being investigated by the Chinese authorities after a magazine report accused it of taking bribes from local suppliers.

The company said it would work closely with the police and review its acquisitions in China following the allegations.

Foxconn, otherwise known as Hon Hai Precision Industry, makes many of the best-selling devices currently on the market, including Apple’s iPhone, Amazon’s Kindle, Microsoft’s Xbox 360 and Sony’s PlayStation 3.

Grease the palm

According to the China Post, the issue came to light after Taiwan’s Next Magazine reported that a manager had been taken into custody in Shenzhen, for allegedly taking bribes from suppliers in exchange for contracts with Foxconn.

Later reports suggested that the police investigation was looking at several examples of this long-established practice, and that Foxconn had cancelled a contract with a supplier which was suspected of offering bribes.

Shenzhen in mainland China is Foxconn’s main base, where it employs around 500,000 people.

“The company will not only thoroughly investigate the personnel implicated in the case… but also review countermeasures to amend acquisition procedures and the integrity of managers and stop similar incidents from happening again,” said Foxconn in a statement.

The company denied its operations in China have been affected by the case and said the preliminary internal probe didn’t find any involvement of the upper management. According to sources quoted by the China Post, the internal investigation could be finished in one to two weeks.

Last year, working conditions at Foxconn factories caused it to appear regularly in the news. In January, staff from the Xbox 360 assembly line threatened a mass suicide due to a pay dispute, while in September, the company had to close one of its facilities after a riot broke out, involving up to 2,000 people. Foxconn later contested this number. A month later, it was claimed teenagers as young as 14 were employed at another factory.

It was recently reported the company started manufacturing smartphones for Microsoft and Amazon, which could appear on the shelves in mid-2013.

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