Two sources close to Foxconn, a major supplier of Apple’s iPhones, confirmed on Monday that the company is facing a tax probe in China, a move guessed to have a link with Taiwan’s upcoming elections.
Global Times Tabloid backed by China had on Sunday said some of Foxconn’s key subsidiaries in China were the subject of tax audits and that China’s natural resources department had conducted on-site investigations on land use by Foxconn enterprises in Henan and Hubei provinces among other places.
The sources who spoke with the Reuters on the condition of anonymity owing to the sensitivity of the matter, said they believed only Foxconn’s probe was made public for political reasons because several companies had been audited by Chinese authorities in recent months were not named.
The audits come less than three months ahead of Taiwan’s presidential election and amid Foxconn’s drive to expand production outside China.
Foxconn, formally called Hon Hai Precision Industry Co Ltd, a major investor in the country employs thousands of Chinese citizens and often regarded by Beijing as an example of the success of Taiwanese investors in the country.
The government of Taiwan accuses Beijing of seeking to exert military and economic pressures to upturn the outcome of the upcoming elections in favor of China which claims that its own the Taiwan’s territory.
Foxconn’s billionaire founder, Terry Gou, who stepped down as company chief in 2019, is contesting in the election as an independent for president, as analyst says that even though he might not win the election for running a high profile campaign, he is a potential divider of opposition’s vote, a way to ensuring a victory for current Vice President Lai Ching-te.
In spite Lai is leading the poll, he is detested by Beijing and his offers of talks have been rebuffed, as he is been labeled a separatist for believing that only the people of Taiwan can decide their own future.
The audits of Foxconn have not been officially announced by any Chinese government department.
Foxconn said in a statement on Sunday legal compliance was a “fundamental principle of its operations, and it would actively cooperate with the relevant units on the related work and operations.