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Former Foxconn Employees Charged with Accepting Bribes from Supply Chain Partners

Thursday January 23, 2014 6:42 am PST by Kelly Hodgkins
Several former Foxconn employees have been charged in Taiwan for allegedly accepting kickbacks from partner companies in Foxconn's supply chain, reports The Wall Street Journal. According to the report, a former general manager is being held on bribery charges and three former employees are released on bail. However, Apple and other Foxconn clients are not being investigated as authorities do not believe those companies were involved in the kickback scheme.

foxconn-iphone_production
The bribery allegations were made public last year when an internal Foxconn audit revealed several employees were accepting kickbacks from supply chain companies. Foxconn then acknowledged the criminal activity and turned the employee(s) over to the Chinese police for investigation.
"We can also confirm that our internal investigation found these violations to be limited to the procurement of consumables and accessory equipment related to a small part of our business," Foxconn said in a statement. "The employees in question are no longer with our company."
The charges come as Foxconn has been under fire multiple times in recent years for labor violations. The company has also been working with Apple to improve conditions for employees in its city-like factories, but it has been a slow process. After agreeing in 2012 to examine worker pay and limit working hours, a recent Fair Labor Association report shows the company now is meeting the FLA's 60-hour work week, but still exceeds China's legal limit for weekly working hours and overtime.


[ 42 comments ]


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AngerDanger
65 months ago
After reading the article, I still have no idea what the workers were bribed to do.
Rating: 7 Votes
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gnasher729
65 months ago

Welcome to China. This is a very common practice and isn't viewed as unethical by a lot of business people there. I wonder if this is being done for the optics.


I think companies will see it as unethical if their employees steal from them.

After reading the article, I still have no idea what the workers were bribed to do.


Management, not workers. "Accepting kickbacks from partner companies in the supply chain". Couldn't be clearer than that. Foxconn needs a million dollar worth of parts. Some person at Foxconn gets the task of finding the best supplier and get the parts. But the contract doesn't go to the best supplier, but to the supplier who pays the largest amount of cash to that person. Which means Foxconn doesn't get the best supplier, and pays more (because the kickback will obviously be added to the price of the order). That's stealing from your employer, which gets you fired and prosecuted when you get found out.
Rating: 6 Votes
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TWSS37
65 months ago
They put the con in Foxconn
Rating: 3 Votes
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chimes
65 months ago
Business as usual

Welcome to China. This is a very common practice and isn't viewed as unethical by a lot of business people there. I wonder if this is being done for the optics.
Rating: 3 Votes
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Consultant
65 months ago

You're viewing this from a Western ethical lens. Accepting remuneration in exchange for directing contracts in a certain direction is extremely common in China. Yes, the Chinese government is being increasingly pressured to crack down on this practice, and Western companies doing business there are having a lot of influence on that, but it kind if is what it is.

Don't get me wrong, I'm all for the crackdown. I've done business in China and been personally burned by this practice.


Yup. It's part of certain cultures.

In the U.S, it's done a different way. For example, it's part of the culture in Washington D.C., where lobbyists (often retired govt. staff) get paid big bucks to talk to friends / former colleagues.
Rating: 3 Votes
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gnasher729
65 months ago

I'm sure it's much more then just a couple of people involved in this.


Of course you are sure. You have not the slightest clue what is happening, but you are sure. These guys were stealing from their employer (Foxconn). If they received $10,000 from a supplier, then Foxconn could have got the same supplies for $10,000 less. Probably for $20,000 less. What you are doing is the same as hearing that two people were injured in a car accident, and saying you are sure there must be a lot more injured.
Rating: 3 Votes
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TsunamiTheClown
65 months ago
Kickbacks for Tips. Solid Apple tips are still worth their weight in gold.

Investors want to know the future.
Rating: 2 Votes
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xraydoc
65 months ago
Wow. You have to do something really bad to be charged with labor violations in China. If convicted, these guys will probably be executed.
Rating: 1 Votes
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GoCubsGo
65 months ago

i just hope this doesn't delay the iPhone 6.


Nice perspective. Don't worry, I'm sure the iPhone 6 is safely on its way. Unlike Tarantino, I assume Cook will allow the iPhone 6 to still be made in spite of any possible leaks.
Rating: 1 Votes
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japanime
65 months ago
The use of the photograph of a random Foxconn employee to illustrate this story is potentially libelous.

Unless, that is, MacRumors is suggesting that the person in the picture is one of those who has been charged with accepting bribes.
Rating: 1 Votes

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