The matter was apparently brought to the company’s attention by the suppliers themselves.
Foxconn manufactures the bulk of all iPhones for Apple, so its safe to say that every month the company makes millions of units for the company. Its not hard to imagine that iPhone component suppliers would have tried to get in the good graces of the executives responsible for picking suppliers, but being told to pay kickbacks is entirely different matter. According to reports, a dozen Foxconn managers have been arrested on suspicion of demanding suppliers to pay kickbacks.
Among those who have been arrested are Liao Wancheng and Deng Zhixian, a retired senior vice president and a sitting director general of the Committee of Surface Mount Technology at Foxconn, respectively. The former is believed to have started this ring, and its even said that Wancheng established an offshore company just so that the kickbacks could be laundered. Suppliers were allegedly told to pay 2.5 percent in kickbacks, and even keep bribing in the future so as to make sure that the orders went through.
Foxconn started an internal investigation when the issue was brought to the company’s attention, though it has not been disclosed for how long the kickback scheme was in play. Apple is yet to comment on the matter.