Apple Supplier Foxconn Comes under Tax Investigation in China Possibly Linked to Taiwan's Upcoming Elections

Foxconn, an essential supplier of Apple's iPhones, faces a tax probe in China, as confirmed by two sources on Monday. According to these sources, this audit was revealed by a state-endorsed paper, hinting at political motives connected to Taiwan's forthcoming elections.

China's state-supported Global Times tabloid reported on Sunday that key Foxconn subsidiaries in China were undergoing tax audits. Additionally, China's natural resources department had conducted site investigations on land use by Foxconn entities in Henan, Hubei, and other provinces.

Several unnamed companies have been audited by Chinese authorities in recent months, but, according to the sources, Foxconn's investigation has been publicly disclosed, they believe, for political reasons. The timing - less than three months ahead of Taiwan's presidential election and concurrent with Foxconn's strategic shift of some production out of China - raises eyebrows.

While Foxconn, officially known as Hon Hai Precision Industry Co Ltd, employs hundreds of thousands of people in China and is a major investor, it has recently started moving some of its operations, including those for iPhones, from China to India. One of the sources viewed the audit as a "warning" to the company amidst this transition.

The first source also suggested the audit's public announcement via a state-backed news outlet could not be a coincidence as Foxconn founder, Terry Gou, bids for Taiwan's presidency in January's elections.

Foxconn reiterated its commitment to legal compliance in a statement on Sunday, confirming that it would cooperate with relevant authorities on any related work and operations.