Sat, Mar 21, 2015 - Page 14 News List

Foxconn manager admits phone theft: prosecutors

AUDIT AND CONTROL:Hon Hai Precision Industry said in a statement that the only theft at its China factories occurred in 2013 and involved pre-production models


A deputy sales manager at Foxconn’s Zhengzhou factory surnamed Tsai, center, is escorted by police officers in Taipei yesterday after being released on bail for allegedly having stolen thousands of smartphones from the company and selling them in China.

Photo: Chen Chih-chu, Taipei Times

A senior manager at Hon Hai Precision Industry Co (鴻海) has admitted to stealing thousands of smartphones, prosecutors said yesterday, in a racket that reportedly made more than US$700,000.

Hon Hai, known in China as Foxconn Technology Group (富士康科技集團), assembles products for international brands such as Apple Inc, Sony Corp and Nokia Oyj. It employs about 1 million workers at its factories across China.

The Taiwanese deputy sales manager worked at the company’s factory in Zhengzhou, Henan Province, which assembles products such as Apple’s iPhone 6. The manager, identified in local media reports by the surname Tsai (蔡), was questioned on Thursday before being released on NT$500,000 bail.

Prosecutors said thousands of phones were stolen in the scam, which they believe involved a network of accomplices.

Local media reported that between 4,000 and 5,000 smartphones, including the iPhone 6, had gone missing and were sold in China for a total of about US$760,000. TV news channel TVBS said the manager shipped the stolen phones out of the Zhengzhou factory in a container.

“He admitted to stealing smartphones from a Foxconn factory in China last year during questioning yesterday,” prosecutors said.

“We suspect that there are accomplices in China and might request judicial assistance from Chinese authorities for further investigation,” a spokeswoman for the New Taipei City District Prosecutors’ Office said.

The company reported the case to the authorities following an internal audit, she added.

Hon Hai yesterday denied local media reports that thousands of iPhone 6 handsets had been stolen from one of its factories in China. The company also denied the stolen phones had been smuggled out of the factory in a container, and said that it has a tight audit and control mechanism in place.

In a statement, Hon Hai said there was an incident of theft at one of its China plants, but it occurred in 2013 and involved pre-production phone models that were manufactured for testing purposes. It said the model in question was not the iPhone 6, but it did not specify which phone was stolen.

Last year, five former Hon Hai employees were charged with breach of trust in Taiwan for allegedly soliciting NT$160 million (US$5.1 million) in kickbacks from suppliers in exchange for clearing quality checks and buying their equipment.

The company said at the time that it planned to seek compensation from the suppliers involved in the case and called for the accused to be “severely punished according to the law.”

Despite the news about stolen iPhones, shares in Hon Hai, the world’s biggest contract electronics maker, increased 2.09 percent to close at NT$93.0 yesterday in Taipei trading, outperforming the main bourse, which rose 0.13 percent from Thursday.

Additional reporting by CNA

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