updated 12:55 pm EDT, Wed August 18, 2010
Says Apple contracts should survive intact
Implication in a kickback scandal should not hurt Pegatron's OEM deals with Apple, the Taiwanese manufacturer suggests. The subsidiary named in the case, Kaedar Electronics, was only acquired in 2008 -- after alleged crimes -- and is not involved in its parent's supply chain for iPod and iPhone products, according to Pegatron. A spokesman earlier stated that Kaedar has been responsible for supplying iPod packaging for several years.
The company further claims Kaedar was only involved in paying commissions to agents to help compete for deals, not kickbacks. Because the situation is under investigation by a US federal court however, Pegatron says it has nevertheless suspended the Kaedar executives involved. Kaedar's original operating team is said to have been left intact after the acquisition, part of a hands-off approach by Pegatron.
The company is one of two primary manufacturers of the iPhone 4. The other is Foxconn, which has been embroiled in controversy of its own because of sweatshop-like working conditions and a rash of suicides. As one step the company has increased wages, but there is no word on whether overtime hours have shrunk to reasonable levels.