Taiwan’s Foxconn, one of Apple’s largest suppliers, is being investigated by authorities in China, according to state media. The probe comes weeks after founder Terry Gou announced his bid for Taiwan’s presidency and stressed that he won’t be pressured by Beijing, despite his extensive business operations in the country. While it is unclear whether the investigations are connected to Gou’s entrance into the presidential race, analysts said the move will send jitters through foreign businesses in China. On Sunday, the state-owned Global Times reported that tax authorities had recently audited Foxconn’s key subsidiaries in the provinces of Guangdong and Jiangsu, where it has major factories. The natural resources ministry had also investigated the company’s use of land in Henan and Hubei provinces, it reported, citing anonymous sources. Foxconn said in statement sent to CNN that complying with the law was one of its “basic principles.” “We will actively cooperate with the relevant units on the related work and operations,” it added. Foxconn, also known as Hon Hai Precision Industry, has iPhone factories in Guangdong and Henan, including the world’s largest in the city of Zhengzhou.
The company’s listed unit in Shanghai, Foxconn Industrial Internet, plummeted by its daily limit of 10% on Monday. Parent firm Foxconn Technology, which is listed in Taipei, fell more than 2%. The probe was revealed after Chinese police reportedly raided the Shanghai office of international advertising agency GroupM, owned by WPP, as Beijing ratcheted up pressure on foreign businesses. Foxconn is one of the world’s largest contract manufacturers. It makes everything from smartphones to electrical vehicles for clients including Apple, but doesn’t sell anything under its own brand. It began operating in China in 1988 and is one of the largest private employers in the country.
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