Foxconn faces tax audit, land use probe, Chinese state media reports

BEIJING (Reuters) – Taiwan’s Foxconn, the largest supplier of Apple (NASDAQ:) iPhones, is the subject of tax audits in China at some of its key subsidiaries, suspected of violating laws and regulations, Chinese state media reported on Sunday.

China’s natural resources department also conducted on-site investigations on the land use of Foxconn enterprises in Henan and Hubei provinces and elsewhere, the nationalist tabloid the Global Times reported. It did not elaborate on the investigations or the timing of them.

“Legal compliance everywhere we operate around the world is a fundamental principle of Hon Hai Technology Group (Foxconn),” the company said in a statement, without addressing the allegations. “We will actively cooperate with the relevant units on the related work and operations.”

Zhang Wensheng, deputy dean of the Taiwan Research Institute of Xiamen University, told the Global Times the audit and land use investigations was a normal procedure that would apply to any enterprise suspected of violating laws and regulations.

“Foxconn’s subsidiaries are obliged to actively cooperate with audits and investigations, and if there are indeed violations of laws and regulations, they should admit mistakes and accept penalties and step up rectification,” Zhang said.