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iPod manufacturer cuts damages claim

To just one renminbi

The iPod manufacturer at the heart of a furore over the treatment of workers in China has reduced the damages it is seeking from a pair of journalists accused of defaming the company.

Hong Fujin, the largest exporter of IT products in China, slashed the amount it is seeking to 1 renminbi (about £0.07) because the original figure, 30m renminbi, had blurred the issue at hand, a company representative said today. The firm also requested that the courts unfreeze the journalists' bank accounts and other assets.

"To refocus the public's attention back to the real issue, [Hong Fujin] will withdraw the provisional seizure motion," it said in a statement posted on the Taiwan Stock Exchange by its parent company, Hon Hai. The companies operate under the trade name Foxconn.

But the company also added the publisher of the report, China Business News, to the lawsuit as a defendant.

Hong Fujin is seeking redress through the defamation lawsuit after a whirlwind of bad publicity provoked by allegations that it treated workers poorly. The story was one of many to follow in the wake of an article by the Mail on Sunday alleging long hours, low pay and poor working conditions at the Longhua site, which produces iPods as well as other IT products.

Apple investigated the claims, and found Hong Fujin in compliance with the majority of its requirements despite several violations of the company's supplier code of conduct, including unsatisfactory living and transportation conditions for workers. Hong Fujin is building new dormitories for workers and seeking ways to improve the way it buses employees from factories to dormitories.

Vindicated by the report, Hong Fujin decided to sue China Business News and two journalists responsible for a 15 June story that it called "maliciously false".

One claim in the June 15 story that Hong Fujin took issue with in its statement is an allegation that for every 1,000 workers at the Longhua site, 500 have pre-existing maladies.

"In fact, we have documented statistics to show how over 99 percent of our employees are healthy and fit," Hong Fujin said in the statement.

But on its blog site, China Business News defended itself on this point. The story was about three female workers who collapsed on the production line, and it quotes a 'Miss Ho' from Foxconn as saying that the workers collapsed due to pre-existing conditions. "For every 1,000 new hires, 500 have pre-existing illnesses," Miss Ho is quoted as saying in the story.

The story does not give any full names of anyone cited for information in the story, and gives a false name to one worker, presumably covering his identification for protection. The surname Ho is common in China.

Foxconn could not immediately be reached to reply to the blog listing.

Hong Fujin was the top exporter of IT products in China last year at a volume of $14.5bn (about £7.6bn), according to China's Ministry of Commerce.


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