Foxconn Says Chinese Authorities Probing Bribery Report

Foxconn Technology Group said Chinese authorities are investigating allegations that at least one executive accepted bribes from suppliers.

The statement came after Taipei-based weekly Next Magazine reported that a Foxconn executive was arrested in Shenzhen in September as part of a bribery probe. The group confirmed that authorities were investigating the allegations and said employees and suppliers were awaiting the results.

Foxconn denied “most” of the report in Next’s Jan. 10 issue without giving specifics and said in the e-mailed statement yesterday that it’s evaluating internal controls and adjusting purchasing rules. The Taipei-based group spoke to agents working with Samsung Electronics Co., Sony Corp. (6758) and Panasonic Corp (6752) during an internal probe, Next reported, citing people with knowledge of the matter it didn’t identify. Foxconn didn’t identify any companies in its statement.

Two Foxconn managers haven’t been at work and are the focus of the internal investigation, Next reported. Louis Woo, a Foxconn spokesman, declined to comment on the whereabouts of the two managers.

No Samsung officials were questioned, said Chenny Kim, a spokeswoman for Samsung Electronics. Sony spokeswoman Mami Imada and Panasonic spokeswoman Megumi Kitagawa both said they hadn’t confirmed the content of the Next article and were unable to comment.

Photographer: Forbes Conrad/Bloomberg

A manhole cover imprinted with the Foxconn Technology Group logo sits in a street at the Longhua Science & Technology Park, also known as Foxconn city, in Shenzhen, China. Close

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Photographer: Forbes Conrad/Bloomberg

A manhole cover imprinted with the Foxconn Technology Group logo sits in a street at the Longhua Science & Technology Park, also known as Foxconn city, in Shenzhen, China.

The allegations were reported by Foxconn to mainland China law enforcement and involve a unit responsible for purchasing surface-mount technology equipment and components worth tens of billion yuan last year, Next reported. It didn’t give a figure for the value of the alleged bribes.

To contact the reporters on this story: Adela Lin in Taipei at alin95@bloomberg.net; Debra Mao in Taipei at dmao5@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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