Hongfujin Precision Industry Shenzhen Company, a wholy-owned subsidiary of Foxconn, is suing two journalists from China Business Net for CNY30 million for causing harm to Foxconn's reputation.

The two journalists are Wang You and Weng Bao and they were the first on the Chinese mainland to report about Foxconn's staff working extra hours. In June, Britain's Mail on Sunday newspaper said that workers in Chinese factories that produced the popular Apple (APPL) iPod were poorly paid and not allowed access to outsiders. The paper said the factories were not directly owned by Apple, but were instead run by Foxconn.

Foxconn is asking the court to seal and freeze the journalists' personal assets for picking up this story and reporting it in the Chinese media. CNB says that it will give full support to its journalists and protect their rights.

At the beginning of July, Guo Taiming, president of Taiwan's Hon Hai Group, which is the parent company of Foxconn, said in Japan that Britain's Mail on Sunday newspaper report about Foxconn's mistreatment of Chinese workers was untrue.

A few weeks ago, Apple dispatched an audit team comprised of members from its human resources, legal and operations groups to carry out a thorough investigation of the conditions at the Foxconn manufacturing site. Apple says it found Foxconn to be in compliance in the majority of the areas audited. However, it did find violations of Apple's Code of Conduct, as well as other areas for improvement that Apple says it is working with Foxconn to address.

The case is being processed and a verdict might not be reached for a few months.