(Bloomberg) — Chinese police have taken into custody four Taiwanese employees at Hon Hai Precision Industry Co., Apple Inc.’s main assembly partner, the latest in a spate of detentions that have rattled investor confidence in the country.
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Police in the central Chinese city of Zhengzhou detained the quartet on charges of breach of trust, according to a statement from Taiwan’s Mainland Affairs Council on Wednesday. Zhengzhou is where Hon Hai, the flagship company of Foxconn Technology Group, operates the world’s largest iPhone assembly plant.
The four employees are all Taiwanese, according to Elsie Tsai, spokeswoman for Taiwan’s semiofficial Straits Exchange Foundation, which provides administrative support for Taiwanese with their affairs in China.
The employees have not damaged Hon Hai’s interest in any way, the council said in the statement, citing its understanding from the company. The incident could have been a result of some local police officers abusing their power, according to the council.
Local media in Taiwan reported that the four Hon Hai employees were detained earlier this year.
A Foxconn representative did not have immediate comment on Thursday, which is a holiday in Taiwan. China’s Taiwan Affairs Office also did not immediately respond to a faxed inquiry.
It’s unclear what exactly triggered the move. Foxconn’s iPhone plant in Zhengzhou — called “iPhone City” because it cranks out the majority of Apple’s marquee devices — is considered one of the country’s signature manufacturing projects. It employs hundreds of thousands and delivers a major boost to the economy of the land-locked province of Henan.
Last year, Chinese regulators conducted tax audits and reviewed land use by Foxconn when company founder Terry Gou was bidding to become the leader of democratic, self-ruling Taiwan, which China sees part of its territory. Later in 2023, Chinese tax authorities handed out a 20,000 yuan ($2,800) fine to a Foxconn subsidiary for overstating expenses. It is still unclear whether Chinese regulators have completed their probe into Foxconn.
Beijing has taken aggressive actions against the staff of foreign firms in recent years as tensions with the US and its allies mount, spurring concerns about the safety of employees at multinational firms.
An executive at Japanese drugmaker Astellas Pharma Inc. was indicted for espionage in August.
Before that, Beijing fined US-based Mintz Group about $1.5 million for illegal data collection, months after officials raided its offices and detained five of its Chinese employees.
More similar incidents took place in 2023. American consultancy Bain & Co. said Chinese authorities questioned staff at its Shanghai office, and security officials publicized a raid at Capvision, a consulting firm with headquarters in New York and Shanghai, accusing the company of abetting espionage efforts by foreign forces.
Authorities also detained an executive and two former employees of WPP Plc, one of the world’s biggest advertising companies.
–With assistance from Jing Li.
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