Foxconn executives jailed on suspicion of taking kickbacks from iPhone parts suppliers
Taiwanese police have reportedly arrested at least a dozen current and former senior managers at Apple manufacturing partner Foxconn on charges that the group accepted bribes from upstream iPhone component suppliers.
Under the alleged scheme, suppliers were required to commit 2.5 percent of their sales to kickbacks and to pay additional bribes for each order. The news was first reported by Chinese-language site Tencent Technology.
The plan is said to have been concocted by retired senior vice president Liao Wancheng. Deng Zhixian, the executive in charge of Foxconn's Committee of Surface Mount Technology, was also named.
The investigation has been ongoing for more than a year. Deng was detained by police in the mainland Chinese city of Shenzhen last September, but Liao was able to return to Taiwan at the time without incident.
Participants are said to have netted 'hundreds of millions' of New Taiwan Dollars --?NT$100 million equals approximately $3.3 million --?from the arrangement. The funds were reportedly funneled into offshore accounts belonging to dummy corporations and later repatriated to Taiwan.
Under the alleged scheme, suppliers were required to commit 2.5 percent of their sales to kickbacks and to pay additional bribes for each order. The news was first reported by Chinese-language site Tencent Technology.
The plan is said to have been concocted by retired senior vice president Liao Wancheng. Deng Zhixian, the executive in charge of Foxconn's Committee of Surface Mount Technology, was also named.
The investigation has been ongoing for more than a year. Deng was detained by police in the mainland Chinese city of Shenzhen last September, but Liao was able to return to Taiwan at the time without incident.
Participants are said to have netted 'hundreds of millions' of New Taiwan Dollars --?NT$100 million equals approximately $3.3 million --?from the arrangement. The funds were reportedly funneled into offshore accounts belonging to dummy corporations and later repatriated to Taiwan.
Comments
This is obviously Apple’s fault.
Well it's never Foxconn's fault when some factory worker commits suicide. Foxconn is untouchable. The shit just rolls uphill (to Tim Cook) /s
Isn't it basically a custom to get drunk with and offer gifts as normal Chinese business model? I know this has reduced somewhat in the current era, due to people actually figuring out all this drinking and smoking is harmful and now there are women and Westerners more in the mix -- but really -- going to jail?
They could have talked to the person and given them a warning. I have to feel like this is some hidden PR move in the offing and this is just the preliminary step.
Expect to see some hype about this and perhaps some extorted concessions.
In matters like these, I rarely pay attention the explanation given -- call me crazy.
This is not a surprised, and it happens all the time, sounds like these guys got a little greedy and go caught. This may also explain why Apple decided to take back the procurement of all the components and taking Foxconn out of the middle of this. It only take one supplier with some ethic not to agree to pay thus not get their fair share of the business then ratting Foxconn out to Apple. Foxconn is known for giving all their business to either the lowest cost supplier which the end customer like Apple may not be aware of or giving it to the supplier who is willing to kick back to the the execs to ensure they get the business.
This is just how it works in the Asia, not like it does not happen in different ways in the US. Wine and dining as well as golfing trips and the such are another way to pay back for getting business.
Somebody needs to be lobbying for the rights of these foreign executives, otherwise companies like Apple will continue to exploit them while reaping obscene profits on their goods. I would feel much better paying a Gajillion dollar premium over an android phone knowing some guy made $300 Million in kickbacks and was able to live out his days freely traveling between his multiple vacation homes on his custom built yacht, forcing Apple to post a loss each quarter.