A Foxconn subsidiary in China was the first to be caught up in a tax and land-use probe of its parent’s operations in the country, with local tax authorities fining the unit CNY20,000 ($2,009) for a minor accounting issue, Bloomberg reported.

The news agency stated Foxconn Industrial Internet in the city of Wuhan was fined for overstating R&D expenses in 2021 and 2022.

Local media reported in late October the government had started a tax audit and review of Foxconn’s use of land in four provinces.

The move was criticised for being politically motivated and perhaps as a warning to Apple, which faces uncertainty in China following a ban on the use of iPhones for official business by central government agencies.

Foxconn is a key supplier for Apple and employed more than 1 million people in China at its peak, including up 350,000 workers at its iPhone assembly plan in Zhengzhou, the capital of east-central Henan province.