China is investigating Foxconn, the world’s largest manufacturer of iPhones, over its tax payments and land use in two provinces, according to Chinese state media.
The Global Times reported on Sunday that officials conducted inspections at Foxconn’s businesses in Henan and Hubei, where the Taiwan-based company employs millions of workers.
Foxconn said it would cooperate with the authorities and that it followed legal compliance everywhere it operated.
The investigation comes as Foxconn’s founder Terry Gou is running for Taiwan’s presidency as an independent candidate. He is seen as a pro-China alternative to the ruling party, which Beijing views as hostile.
Gou, who stepped down from Foxconn’s board in September, said he was not afraid of China and that he would welcome the confiscation of his assets by the Communist party.
The Global Times said some in Taiwan suspected the probe was linked to Gou’s candidacy, but Chinese experts dismissed the claim and said it was a normal and legitimate tax inspection.
They also warned that the investigation could affect the outcome of the January election and that both sides of the Taiwan Strait should work together to prevent a disaster caused by secessionists who seek Taiwan’s independence.
Taiwan, a self-governed island, has limited diplomatic ties with other countries due to China’s pressure. The US, however, remains its most important ally.