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June 24, 2017

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Two ex-Hon Hai executives detained in high-profile bribery scandal

TAIPEI, Taiwan -- Two former executives of Hon Hai Precision Industry Co. (鴻海精密), Liao Wan-cheng (廖萬成) and Hau Xu-guang (郝緒光), have been detained by prosecutors, in the wake of a recently exposed bribery scandal.

It was revealed recently that ranking officers of Hon Hai were involved in bribery in mainland China. It is one of the largest scandals related to offenses of breach of trust.

Hon Hai Chairman Terry Gou (郭台銘) ordered that the case be thoroughly investigated until the very end. Sources said that starting last year, Gou gave instructions to dissolve some of the company's subsidiaries and to implement corporate restructuring, in an effort to completely eliminate unscrupulous acts from the corporation.

It was alleged that some members of the Surface Mount Technology (SMT) committee at Hon Hai have been receiving kickbacks from its tin supplier. The company procures over 1,000 kilograms of tin per month. Committee members procured materials at low prices and then sold them at higher prices, pocketing the profits. Committee members took advantage both of the market and the company, sources said.

The Taipei District Prosecutors Office obtained a warrant to detain former senior deputy general manager Liao Wan-cheng (廖萬成). Another ranking officer, Hau Xu-guang, was also detained by prosecutors. Liao and Hau played crucial roles in the bribery case, sources said.

Terry Gou Takes Case 'extremely seriously'

Secretary-General of the SMT committee Deng Chih-hsien (鄧志賢) is currently out on bail of NT$3 million. Former Hon Hai engineering department manager Yu Chi-an (游吉安) is out on bail of NT$2 million, and senior manager Chen Chih-chuan (陳志釧) was released on bail of NT$1 million. They were released on bail because two crucial suspects, Liao and Hau, have been detained, making collusion less likely.

It was reported in a local media that ranking officers at Hon Hai pocketed a total of NT$15 billion, an accusation which Hon Hai denied in its latest announcement, saying that it was only media speculation. The company added that as the case is currently being investigated, it is unable to make further comments.

Prosecutors have been investigating the case for one year, and only began to conduct interrogations a couple days ago. Up to 19 teams were dispatched to conduct searches and interrogations.

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