Chinese manufacturing giant Foxconn, which has more than one million employees, is the biggest electronics maker in the world. The company builds many of the popular electronics devices available in stores around the globe, including Apple’s iOS devices. However, Foxconn has not been running a smooth operation, as it had to deal with several scandals.
After being heavily criticized for labor practices in the past, the company is now part of a different investigation which revealed that several former employees allegedly took bribes totaling more than $5 million from component suppliers in return for preferential treatment.
The Wall Street Journal reports that Taiwan prosecutors indicted the five former Foxconn Technology Group on Wednesday after an investigation, which lasted over a year. Apparently, from 2009 to 2011, the five people received kickbacks from 10 suppliers in form of “entertainment and service fees.”
In return, they made sure that those suppliers would be selected for contracts, and would also get better prices and higher volumes. Furthermore, the same suppliers were also paid faster than others who were not involved in the bribery scheme.
As for Foxconn, the company is encouraging its partners to help the authorities – an exec from an unnamed supplier was also indicted on a charge of bearing false witness – and says it won’t work with them in the future. It’s not clear what that means for the future of Foxconn’s manufacturing business, as those suppliers have not been publicly named, and it’s not clear whether future production runs will be affected in any way by the scandal.
“Suppliers should continue to proactively cooperate with prosecutors in this investigation. For involved suppliers which had come clean with prosecutors, the company [Foxconn] would handle the situation in a confidential manner; for suppliers who were found involved in this case, Foxconn and its units would not select them in future and would ask for compensation according to the law,” Foxconn said in a statement.
