Taiwanese authorities, investigating allegations that Foxconn Technology employees accepted bribes from suppliers, yesterday detained one of the company's former executives.
Three other ex-Foxconn employees, accused of taking bribes, were released on bail, while a middleman was also detained, said Chang Chieh-chin, the head prosecutor at the Taipei District Prosecutor's Office.
Investigators on Tuesday searched 19 locations including residences and offices of suppliers.
The Taipei-based maker of Apple's iPhones and iPads said this week it was co-operating with authorities into breaches of its internal code of conduct by former members of its procurement office.
"This is a matter that we brought to the attention of authorities in both Taiwan and mainland China in September 2012, as we sought their help in pursuing an investigation," Foxconn said. "Our internal investigation found these violations to be limited."
The allegations surfaced after Taiwanese media reported last year a manager at Foxconn, which also assembles products for Apple, had been detained by police in Shenzhen.
The Taiwanese manager allegedly solicited and took bribes from suppliers in exchange for buying their machines and equipment for the company, reports said, adding this appeared not to be an isolated case.
The Apple Daily on Wednesday said a key suspect had allegedly pocketed about NT$100 million (HK$25.6 million) in kickbacks from suppliers by using his position in a procurement committee that buys up to NT$50 billion of equipment a year.
Foxconn flagship company Hon Hai Precision Industry said in an exchange filing in Taiwan this week it had been requiring employees and companies they do business with to sign legal agreements promising to refrain from corrupt or unfair business dealings. Authorities in Taiwan interviewed at least 10 suspects and searched their homes this week, the Central News Agency reported.
"The discovery that a small group of employees and suppliers violated our code of conduct is very disappointing," Foxconn said, and vowed support for prosecution of anyone found guilty.
Bloomberg, Agence France-Presse