02 Foxconn

Time and time again, the manufacturers that Apple has tapped in China to mass produce its devices start making rounds in the news. Often the allegations deal with worker abuse and labor violations, apart from the usual product rumors that are supposedly spread by sources within manufacturing facilities Foxconn has been Apple’s manufacturer for a long, long time. Its actually the biggest manufacturer of Apple products, and it finds itself surrounded by allegations once again. Reports coming in from China claim that around a dozen Foxconn managers have been arrested on charges on demanding kickbacks from iPhone component manufacturers.

Those taken in custody include Liao Wancheng, a retired senior vice president and Deng Zhixian, director general of Foxconn’s Committee of Surface Mount Technology. Wancheng is though to be the brains behind the kickback scheme. Reports claim that companies who wanted to be picked up as component suppliers for the iPhone had to pay as much as 2.5 percent in kickbacks to the managers, with even more bribes down the road to ensure that orders went through. Wancheng is said to have set up an offshore company to launder kickbacks. An internal investigation at Foxconn started when suppliers themselves complained about the issue. Foxconn is the biggest manufacturer of the iPhone, seeing as how it makes millions of units every quarter, being picked up as a component supplier for the iPhone would have done wonders for those suppliers. Apple is to comment on this report.

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