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Hon Hai to pursue alleged bribery cases

TAIPEI -- Hon Hai Group Chairman Terry Gou has insisted that an alleged bribery case within the group be aggressively pursued, and he is cooperating with police on both sides of the Taiwan Strait on the case, a Hon Hai source said yesterday.

The source said Gou has asked James Lee, a general manager in charge of ethics and business violations within the group, to look into the situation.

Taiwan's Next Magazine reported recently that Lee was informed several months ago that executives on the group's Surface Mount Technology (SMT) committee had allegedly solicited bribes from suppliers on a long-term basis.

The informers reportedly attached suspicious accounting records to support their accusations, and Lee immediately reported the matter to Gou.

According to the source, an internal investigation could be completed within one or two weeks.

The Hon Hai Group, also known as Foxconn, has set up several committees to integrate new technologies within its various businesses.

The SMT committee was authorized to sign contracts for equipment used by the company's business groups and allegedly took bribes from those suppliers.

A preliminary internal probe has found that the case implicates only Hon Hai procurement executives and not upper management.

The source said Gou has strict ethical requirements for procurement executives because of the size of the purchases made by the company.

Meanwhile, in a written statement issued Wednesday, Hon Hai said that its supply chain involving Taiwanese businesses in China, its personnel in China, and its business development are normal and have not been affected by the allegations.

The statement said that based on Gou's instructions, the company will not only try to find out who was involved and why the bribery occurred, but will also examine its internal practices to prevent the same thing from happening again.

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