Taiwan probes Foxconn ex-employees over bribery claims; a key suspect had pocketed US$3.33 million in kickbacks from suppliers by using his top position in a procurement committee that buys up to TW$50 billion of equipment a year

January 24, 2014 Leave a comment

Taiwan probes Foxconn ex-employees over bribery claims
Wednesday, January 22, 2014 – 15:26
AFP
TAIPEI – Taiwanese authorities launched island-wide raids to investigate allegations that some former managers at the technology giant Foxconn had solicited bribes from suppliers, prosecutors and the company said Wednesday.
More than a dozen people, including former employees, were questioned and at least one suspect was detained as investigators on Tuesday searched 19 locations including residences and offices of suppliers, local media said citing authorities.
The investigation is the latest setback for the company, which has come under the spotlight after suicides, labour unrest and the use of underage interns at its Chinese plants in recent years.
The “integrity of our employees and suppliers is something we take very seriously… The discovery that a small group of employees and suppliers violated our code of conduct is very disappointing,” the company said in a statement Tuesday.
The allegations surfaced after Taiwanese media reported last year that a manager at Foxconn – which assembles products for Apple, Sony and Nokia – had been detained by police in the southern Chinese city of Shenzhen.
The Taiwanese manager allegedly solicited and accepted bribes from suppliers in exchange for buying their machines and equipment for the company, reports said, adding that this appeared not to be an isolated case.
Foxconn said at that time it was reviewing its acquisition procedures and the integrity of managers, and that its operations in China had not been affected.
Taiwan’s Apple Daily newspaper on Wednesday said a key suspect had allegedly pocketed around Tw$100 million (US$3.33 million) in kickbacks from suppliers by using his top position in a procurement committee that buys up to Tw$50 billion of equipment a year.
In its latest statement, the company said the alleged violations were limited to the procurement of consumables and accessory equipment.
Foxconn, also known as Hon Hai in Taiwan, is the world’s largest maker of computer components and employs about one million workers at its factories across China.

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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