Pegatron Suspends Manager at Kaedar Over iPhone Kickbacks

Pegatron, spun off from Asustek Computer, said it suspended the head of a Chinese unit after an Apple employee was charged for receiving kickbacks.

Jonathan Chang, finance director at Pegatron, said “She believed that she had paid the money for commercial purposes and not for kickbacks.” The employee’s name was not disclosed.

Paul Devine, the 37 year old global supply manager at Apple pleaded not guilty to wire fraud charges and laundering in a U.S. court Monday. Kaedar, South Korea’s Cresyn Co. and Singapore-based Jin Li Mould Manufacturing Pte were among the companies named in a complaint brought up by Apple against Paul Devine. Payments were from from Kunshan, eastern China-based Kaedar to Devine’s company, CPK Engineering, dating all the way back to 2007, Chang said. He wasn’t able to say how much money was paid or how long the transactions continued.


Pegatron rose 1.6 percent to close at NT$38.80 in Taipei trading after dropping as much as 4.8 percent. The stock lost 4.3 percent yesterday after the indictment.

Kaedar makes mechanical parts and plastic injection moldings, including cases for iPods and iPhones, Pegatron Chief Financial Officer Charles Lin said by telephone today. Paying commissions to agents for sales orders is common practice for Pegatron and the industry, while the company doesn’t pay bribes or kickbacks to secure business, Lin said.

Pegatron counts Apple among its customers while Kaedar doesn’t supply to Apple directly, Chang said.

Kaedar had revenue of NT$1.7 billion ($53 million) last year with net income of NT$170 million, according to the 2009 annual report of Asustek, the maker of the Eee PC low-cost computer. Pegatron was spun off from Asustek and listed on the Taiwan Stock Exchange on June 24 this year.

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