Foxconn shares fall after China’s tax audit, land use probe report

A woman drives past Foxconn’s logo outside the company’s building in Taipei, Taiwan on November 9, 2022. REUTERS/Ann Wang/File Photo Get license rights

TAIPEI, Oct 23 (Reuters) – Shares in Taiwan’s Foxconn ( 2317.TW ), a key supplier of Apple ( AAPL.O ) iPhones, fell as much as 3% on Monday. Land use surveys in China months before Taiwan elections.

China’s state-backed Global Times reported that some of Foxconn’s key subsidiaries in China were subject to tax audits and that China’s Ministry of Natural Resources had also conducted on-site investigations into Foxconn’s land use in Henan and Hubei provinces and elsewhere.

The Global Times does not provide details on tax or land use studies that have not been officially announced by any Chinese government department.

Foxconn said in a statement on Sunday that legal compliance is a “fundamental principle” of its operations everywhere and that it will “actively cooperate with relevant departments in related work and activities.”

It declined to comment further on Monday. Foxconn, known as Hon Hai Precision Industry Co Ltd, makes most of its iPhones at its Zhengzhou plant in Henan province, where it employs about 200,000 people.

The Chinese state media report comes less than three months before voting in Taiwan’s presidential and parliamentary elections.

Foxconn’s billionaire founder Terry Goh, who has no stake in the company’s day-to-day operations and stepped down as the company’s chairman in 2019, is running as an independent candidate despite being down in the polls.

He accused Taiwan’s ruling Democratic Progressive Party (DPP) of bringing the island to the brink of war with China with its hostile policies, and that only he, with his extensive business and personal connections in China and the United States, could keep the peace.

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Huang Shih-hsiu, Gou’s campaign spokesman, referred questions about the Foxconn probe to the company, saying Gou was entrusted to run the company four years ago, no longer sits on the board, and is now only a shareholder.

Speaking at a campaign rally on Sunday, Taiwanese Vice President Lai Ching-te, the DPP’s presidential candidate and poll frontrunner, said the Chinese report on the investigation was “unexpected” and “regrettable”.

“Therefore, I hope all our people can support Hon Hai and support Taiwanese companies,” he said in remarks carried by Taiwanese television stations.

Foxconn shares were down 2.4% at 0204 GMT, underperforming the broader Taiwanese market ( .TWII ).

Ben Blanchard reports; Editing by Jacqueline Wong, Edwina Gibbs and Sonali Paul

Our Standards: Thomson Reuters Trust Principles.

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