China’s state-backed the Global Times said some of Foxconn’s key subsidiaries in China were the subject of tax audits and that China’s natural resources department had also conducted on-site investigations on the land use of Foxconn enterprises in Henan and Hubei provinces and elsewhere.
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The Global Times did not give details of the tax or land use probes, which have not been officially announced by any Chinese government department.
Foxconn said in a statement on Sunday that legal compliance was a “fundamental principle” of its operations everywhere, and that it would “actively cooperate with the relevant units on the related work and operations”.
It declined further comment on Monday. Foxconn, formally called Hon Hai Precision Industry Co Ltd, makes most iPhones at the Zhengzhou plant in Henan province where it employs about 200,000 people, though it has other smaller production sites in India and southern China.
The Chinese state media report comes less than three months before Taiwan votes in presidential and parliamentary elections.
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Foxconn’s billionaire founder Terry Gou, who no longer has a role in the company’s day-to-day operations and stepped down as company chief in 2019, is running as an independent candidate though he is at the bottom of polls. He has accused Taiwan’s ruling Democratic Progressive Party (DPP) of taking the island to the brink of war with China by its hostile policies and that only he, with his extensive business and personal contacts in China and the U.S., can maintain peace.
Gou’s campaign spokesman Huang Shih-hsiu referred questions on the Foxconn probe to the company, saying Gou had four years ago handed over running the company, no longer sat on the board and was only a shareholder now.
Speaking at a campaign rally on Sunday, Taiwan Vice President Lai Ching-te, the DPP’s presidential candidate and leading the polls, said the Chinese report on the investigation was “unexpected” and “regretful”.
“So I hope all our people can support Hon Hai, support Taiwanese companies,” he said, in comments carried by Taiwanese television stations.
Foxconn shares were down 2.4% at 0204 GMT, underperforming the broader Taiwanese market.
