Foxconn, a Taiwan-based company known for manufacturing a good part of Apple's iPhones, fell sharply on the stock market this Monday after it was revealed over the weekend that Chinese authorities are investigating its accounts, land use and possible violations of local regulations. . Foxconn shares listed in Taipei fell 2.2%, while those of its subsidiary Foxconn Industrial Internet, listed in China, fell up to the 10% limit imposed on the Shanghai Stock Exchange.
According to the state newspaper Global Times, an investigation has been opened into its accounting and the legality of land use. Chinese authorities have reportedly carried out tax inspections at Foxconn companies in Guangzhou and Jiangsu provinces, among other places, while China's Department of Natural Resources has also carried out on-site investigations into land use by subsidiaries. of Foxconn in Henan and Hubei provinces.
The company has assured that it will collaborate with the investigation and has defended that "legal compliance in all places where it operates in the world is a fundamental principle."
The authorities' moves come shortly after certain officials were banned from working with iPhone phones for security reasons. Foxconn has been at the center of China's growth as a high-tech manufacturing destination and, with Apple's halo, is seen as a bellwether of opportunities for other companies in the country.
The political aspect also has an influence: according to Reuters sources, the investigation could have a political motivation. Foxconn founder Terry Gou is running as an independent candidate in Taiwan's presidential election next January, the outcome of which will have a significant influence on the relationship between Taiwan and China. The businessman handed over management of Foxconn to a CEO four years ago and resigned from his position on the board of directors in September, after announcing his presidential candidacy, although he retains a 12.5% stake. The elections are taking place in less than three months and their outcome will have a significant influence on the relationship between Taiwan and China.
