A senior official with the Industries Department confirmed to TNM that the loss was based on an improper assessment.

Security guard checking people near gate Wistron Corp building in the distance with vans and trucks parked in front
news Violence Wednesday, December 16, 2020 - 16:16

Wistron Corp significantly pared down its projected losses from the violence at its Narasapura plant on Tuesday, bringing it down from Rs 437 crore to Rs 26-52 crore. In its police complaint in Kolar, Wistron had put its losses at Rs 437 crore, which is New Taiwan dollar (NTD) 1.67 billion. However, in a filing with the Taiwanese stock exchange on Tuesday, Wistron said its preliminary estimates were NTD 100 to 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 damages in various areas of the facility’s campus. Unlike earlier reports stated, the violence did not cause any material damage to major manufacturing equipment and warehouses, with preliminary estimates of damages in the range of NTD 100 to 200 million,” Wistron said in its filing. 

“Wistron is co-working with related government authorities and police officials regarding investigation of this incident as well as negotiating with Insurance companies,” it added. 

Wistron Infocomm Manufacturing (India) Ltd chief executive TD Prashant in a complaint to the police on Sunday said that expensive office equipment, mobile phones and assembly equipment valued at Rs 437 crore. In the complaint, he stated that office equipment, mobile phones, production machinery and related gadgets worth Rs 412.5 crore was lost. Infrastructure worth Rs 10 crore, Rs 60 lakh worth cars and golf carts, smartphones and other gadgets worth Rs 1.5 crore were among those which suffered damage, stolen or lost.

A senior official with the Industries Department confirmed to TNM that the loss was based on an improper assessment. 

But what caused the drastic turnaround of reducing the quantum of loss caused by the violence? Here are the possible reasons: 

Apple investigation

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 suppliers of Apple devices in India. 

Apple has a strict supplier code of conduct and follows up on any reports of violations. In November, Apple Inc had suspended new business with Pegatron after labour violations were reported. In 2019, it interviewed more than 52,000 supplier employees as part of its supplier assessments.

Apple, in its supplier code of conduct, states that suppliers must meet all legal requirements relating to wages and benefits, including paying accurate wages in a timely manner. “In addition, the use of wage deductions as a form of disciplinary measure is prohibited. All use of temporary and outsourced labour shall be within the limits of the local law," it adds.

Wistron, like Pegatron, could also stand to lose out on its business with Apple. 

"Apple is dedicated to ensuring 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 dispatching additional Apple team members and auditors to the facility," Apple said in a statement.

The state government and insurance

The state government dispatched 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, sources added that Wistron’s insurers did not agree with the assessment, and argued it to be far lesser. Wistron is currently facing an enquiry from the labour department over allegations of non-payment of wages. Moreover, a report submitted by three officers of the Director of Companies on December 13 says that there was a difference in the payment that the company did to contractors and the company has agreed to rectify it. It also added that the housekeeping staff were not paid and that contract employees were paid only by the 12th of every month.

With inputs from PTI

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