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Business News/ Companies / News/  No significant impact due to violence, says Wistron

BENGALURU : Apple Inc’s manufacturing partner Wistron Corp. has said that the violence, vandalism and loot at its Narasapura plant in Kolar, around 60km from Bengaluru, has not had a significant impact on the company.

“As the Narasapura facility is a new operation and the shipment quantity is still small, the incident will not cause significant impact to Wistron," the company said in a filing to the Taiwan stock exchange on Sunday.

The Narasapura plant produces the iPhone SE (2020) and iPhone 7 models for Apple.

The statement comes two days after Wistron acknowledged mistakes on its part, including non-payment of salaries to contract workers, and removed the vice-president who oversees India operations after violence broke out at the plant on 12 December.

Hundreds of contract workers, among others, were seen vandalising company property, setting fire to vehicles, damaging machinery, and stealing mobiles, laptops, and other property in the violence that lasted at least three hours.

The company employs around 8,500 contract workers who have complained of unexplained cuts in salaries, wage dues, and long working hours that fuelled anger and led to the violence that made headlines globally. The Centre and the Karnataka government are taking a keen interest in resolving the crisis, which has the potential to damage India’s, and Karnataka’s, investor-friendly image.

In an earlier filing, Wistron said that it suffered losses to the tune of 26-52 crore. On 12 December, in a complaint to the police, Wistron had estimated losses of around 437 crore, including theft of products such as iPhones, laptops, and precision machinery worth 412 crore.

People aware of the developments said the damage and insurance assessments are being undertaken to determine exact losses.

Apple has announced suspending new business to Wistron after its initial investigations have pointed to violations by its manufacturing partner. The role of six staffing firms that supplied contractual workforce to Wistron are being probed. The firms are suspected to have siphoned off a lion’s share of salaries paid to workers.

Wistron said it is collaborating with the government on ongoing investigations and related insurance claims. “The company will work with our customer in terms of correcting issues and operational recovery," Wistron said in its filing.

The police have so far arrested around 150 out of the more than 7,000 unnamed people in Wistron’s complaint, said a police officer from Kolar district. A few laptops and mobile phones were discarded on the side of the highway, people aware of the developments said. The police officer said that there have also been instances of villagers returning stolen property to the company.

Meanwhile, Karnataka chief minister B.S. Yediyurappa on Monday launched the affidavit-based clearance (ABC) system, which is part of an amendment to the state’s facilitation Act, to enable investors to establish their businesses without any clearances/approvals from various departments for the first three years.

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Updated: 21 Dec 2020, 11:41 PM IST
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