Apple Inc (NASDAQ:AAPL) stock is on the back foot ahead of Monday’s opening bell, down nearly 1% at $171.16, amid reports of an investigation into Taiwan-headquartered iPhone manufacturer Foxconn.
The Chinese mainland tax authorities are probing key enterprises of Foxconn in Guangdong, Jiangsu, and other provinces, according to a report by The Global Times.
The move comes as Foxconn’s founder Terry Gou, who resigned from the board in 2019, seeks to become Taiwan’s next president in elections scheduled for next January, in which he is running as an independent.
According to The Global Times, "many people" in Taiwan believe the tax investigation is linked to Gou’s presidential run.
However, Chinese state officials said it was “normal and legitimate, as any company goes through tax inspections".
Other commentators see the investigation as a means of hitting back at US-led technology sanctions against China, which have severely limited China’s access to cutting-edge artificial intelligence semiconductors.
US President Joe Biden has ramped up these sanctions in order to hobble China’s military advancements.