Apple Kickback Scheme Not Yet Singapore Investigation

Apple is still investigating an alleged kickback scheme by a midlevel manager, who is due in court today for a bail hearing, but Singapore's anti-corruption department seems to be leaving the case so far to U.S. authorities.

Apple may have launched an investigation into an internal manager's alleged kickback scheme with Asian suppliers, but Singapore's Corrupt Practices Investigation Bureau (CPIB) is declining to say whether it will investigate the matter on its own.

The Apple manager accused of accepting bribes and kickbacks, Paul Shin Devine, will enter court for a bail hearing at 1:30 p.m. PDT. The federal grand jury indictment, whose 23 counts included wire fraud and money laundering, also named Andrew Ang, an Apple-supplier employee whose current whereabouts are unknown. 

"CPIB is unable to comment on the case against Paul Shin Devine and Andrew Ang as it is currently handled by the U.S. authorities," CPIB spokesperson Tan Chai Ying e-mailed in response to questions from IDG News Service. "CPIB will look into all information received in regard to corruption offences and take necessary action against the parties involved if evidence is found."

While the six Asian suppliers went unnamed in the indictment, three have come forward in recent days to either protest their innocence or claim they've launched investigations of their own. One of the latter, JLJ Holdings, is based in Singapore. The other two are South Korea-based Cresyn, which acknowledged a relationship with Devine but said all interactions were strictly above board, and Pegatron, whose former acquisition Kaedar was named in the indictment as a kickback source.  

"Devine approached us first and offered to give us business consulting to help advance into the U.S. market," an unnamed official at Cresyn told Reuters on Aug. 17. "We accepted his offer and received general information about U.S. markets, and in return we offered him a small consulting fee. But this was based on a legal contract we made with him in 2007."

According to the federal indictment, Devine offered six unnamed Asian suppliers confidential information on Apple's purchasing plans for product components. In exchange, he allegedly received more than $1 million in bribes and kickbacks, via a network of U.S. and offshore bank accounts.

Apple's spectacular success with many of its product lines, including the iPad, has represented a potential windfall for suppliers who can fulfill orders for components. However, existing suppliers have also found themselves under enormous pressure to deliver those components in the face of massive demand. For the third quarter of fiscal 2010, Apple reported sales of 3.27 million iPads, along with 3.47 million Macs, 8.4 million iPhones and 9.41 million iPods.