A senior official in the Department of Industries confirmed to TNM that the loss was based on an incorrect assessment.
Wistron Corp significantly reduced its projected losses from the violence at its Narasapura plant on Tuesday, lowering it from Rs 437 crore to Rs 26-52 crore. In his police report in Kolar, Wistron had estimated his losses at Rs 437 million, which is the New Taiwan Dollar (NTD) 1.67 billion. However, in a filing with the Taiwan Stock Exchange on Tuesday, Wistron said that its preliminary estimates were NTD 100-200 million (Rs 26,13,43,509.70 – Rs 52,26,87,019.40)
“Regarding the damage to our Narasapura facility in India, the company is assessing the extent of the damage in various areas of the facility campus. Unlike previous reports, the violence did not cause any material damage to major manufacturing and warehouse equipment, with preliminary estimates of damage in the range of NTD 100 to 200 million, ”Wistron said in his presentation.
“Wistron is collaborating with related government authorities and police officers regarding the investigation of this incident and is also negotiating with insurance companies,” he added.
Wistron Infocomm Manufacturing (India) Ltd CEO TD Prashant, in a complaint to the police on Sunday, said the expensive office equipment, mobile phones and assembly equipment valued at Rs 437 crore. In the complaint, he claimed that office equipment, mobile phones, production machinery and related appliances worth Rs 412.5 million were lost. Infrastructure worth Rs 10 million, cars and golf carts worth Rs 60, smartphones and other devices worth Rs 1.5 million are among those that were damaged, stolen or lost.
A senior official in the Department of Industries confirmed to TNM that the loss was based on an incorrect assessment.
But what caused the drastic change of reducing the amount of loss caused by violence? Here are the possible reasons:
Apple Research:
Wistron assembles the iPhone 7 in Bengaluru and the Kolar facility assembles the latest version of the iPhone SE. Foxconn, Wistron and Pegatron were the top three Apple device vendors in India.
Apple has a strict code of conduct for suppliers and tracks reports of violations. In November, Apple Inc had suspended new business with Pegatron after labor violations were reported. In 2019, it interviewed more than 52,000 supplier employees as part of its supplier evaluations.
Apple, in its supplier code of conduct, states that suppliers must comply with all legal requirements related to wages and benefits, including paying exact wages in a timely manner. “Furthermore, the use of salary deductions as a form of disciplinary measure is prohibited. All use of temporary and subcontracted labor will be within the limits of local law, ”he adds.
Wistron, like Pegatron, could also lose its business with Apple.
“Apple is dedicated to ensuring that everyone in our supply chain is treated with dignity and respect. We have teams on the ground and immediately launched a detailed investigation at Wistron’s Narasapura facility in India. We are also sending additional auditors and members from the Apple team to installation, “Apple said in a statement.
State government and insurance
The state government sent teams to the site, and at least one of these teams, sources said, accepted the company’s initial assessment of its losses at Rs 437 crore. It is important to note that Wistron is one of the largest investments in Karnataka, and it has been on the side of the company and has been sending a message that it is still a viable investment destination.
However, the sources added that Wistron’s insurers disagreed with the assessment and argued that it was much lower. Wistron is currently facing a labor department investigation into allegations of unpaid wages. On the other hand, a report presented by three officials of the Director of Companies on December 13 says that there was a difference in the payment that the company made to the contractors and the company agreed to correct it. He also added that the cleaning staff were unpaid and that the hired employees were paid only on the 12th of each month.
With PTI inputs
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