Samsung Electronics Co.’s share price down, to suspend a China-based supplier amid child labour concern

The biggest smartphone manufacturer in the world – Samsung Electronics Co. made an official statement today, revealing that one of its suppliers in China was suspended after the company founded evidence of child labour. According to the statement of Samsung Electronics Co., the case is being investigated by the authorities and the supplier is to be permanently barred from the smartphone manufacturers business if the claims of hiring underage workers are proved.

The company said in the statement, which was cited by Bloomberg: “Following the CLW allegations, however, Samsung found evidences of illegal hiring process that took place on June 29. Samsung will strengthen its hiring process not only at its production facilities but also at its suppliers to prevent such cases from reoccurring.”

The announcement comes after last week China Labour Watch (CLW) claimed that at least 5 children under the legal age of 16 were found to have been hired in a factory of Shinyang Electronics, which is one of the Chinese suppliers of Samsung Electronics Co. Todays decision comes less than a week after the accusations of child labour practices in the companys suppliers factory.

As reported by the Financial Times, Samsung Electronics Co. said in its statement: “Samsung decided to temporarily suspend business with the factory in question as it found evidence of suspected child labour at the worksite. If the investigations conclude that the supplier indeed hired children illegally, Samsung will permanently halt business with the supplier.”

Samsung, which is currently the worlds largest smartphone maker, said that three audits of this very supplier have been carried out by it in the last 18 months. The latest audit is dated June 25th. This is the first time when Samsung Electronics Co. has reported that it found signs of child labour in its suppliers.

Samsung Electronics Co. Ltd was 1.68% down to close at 1,284,000 South Korean won per share on Friday, marking a one-year change of -2.13%. According to the information published on the Financial Times, the 41 analysts offering 12 month price targets for Samsung Electronics Co. Ltd have a median target of 1,700,000, with a high estimate of 2,200,000 and a low estimate of 1,150,000. The median estimate represents a 32.40% increase from the last price of 1,284,000.