Dongguan Shinyang Electronics, Former Samsung Supplier, Halts Production Indefinitely

After news broke that a Chinese Samsung Electronics Co. Ltd. (KRX:005935) supplier was suspected of using child workers, the world’s largest smartphone maker severed ties with the plant. Spokespeople from the Dongguan Shinyang Electronics' factory said production should start up again soon, but it doesn’t seem likely given reports from the ground.

While unnamed officials told Reuters “the problems will be resolved in a speedy manner so that we can resume production soon,” the plant appears idled indefinitely.

During a recent visit to the plant, reporters from Reuters said they found workers cleaning the factory machines and doing other menial tasks. One man, sporting a dragon tattoo, claimed the factory owner owed more than $950,000 (six million yuan) for an earlier shipment of supplies. The factory is owned by South Korea's Shinyang Engineering Co. Ltd. (KOSDAQ:086830).

Earlier this month, Korea-based Samsung said it would shut down all operations at the plant after a U.S. watchdog group called China Labor Watch said it found evidence of child laborers working there.

“It’s unfortunate that the allegation surfaced despite Samsung’s efforts to prevent child labor at its suppliers," Samsung said in a statement.

At the end of June, Samsung published an annual report on its labor and environmental practices, outlining how two years’ worth of audits showed no evidence of underage workers.