Related story: Shenzhen court ruling on Foxconn case "absurd"

    BEIJING, Aug. 31 -- A legal battle between iPod manufacturer Foxconn and two Shanghai journalists took a dramatic turn yesterday, as Foxconn decided to slash a compensation claim on the reporters from 30 million yuan (US$3.77 million) to just 1 yuan.

    A court also lifted a freeze on the property of Wang You, a reporter for China Business News, and Weng Bao, an editor at the newspaper.

    Foxconn is the trade name of the Taiwan-based information technology manufacturer Hon Hai Precision Industry Co.

    Hon Hai held an urgent meeting late last night and made the decision to cut the compensation fee and add China Business News to its list of defendants, China News Service reported.

    Foxconn's subsidiary in Shenzhen reportedly petitioned the city's Intermediate People's Court on July 10, alleging that a report by Wang of substandard work conditions had damaged its reputation.

    The company was seeking 20 million yuan from Wang and 10 million yuan from Weng.

    Foxconn said it lowered the compensation claim so that the public could focus on the fact that "the untrue reports had damaged the reputation of our company," and not just on the 30 million yuan compensation claim, Sina reported, citing company spokesman Edmund Ding.

    Ding was not available for immediate comment late yesterday.

    The company had previously said in a statement yesterday morning that it would use the law to protect its rights and donate all the compensation money to charity.

    However, there is as yet no end in sight to the case, which has rocked the journalism industry, which is concerned the lawsuit could set a worrying precedent.

    China Business News announced late last night it might make a counter claim against Foxconn to protect its rights and the rights of its employees.

    "Foxconn's claim goes against our right to report stories, because we made the story based on facts," the newspaper said in a statement.

    The newspaper said it was Wang's duty as a journalist to write the story, and that the newspaper will absorb all legal responsibilities for her.

    Journalists Weng and Wang have started a blog, which attracted almost 70,000 hits in its first 26 hours.

    "I thank my newspaper, which firmly supports us, and I also appreciate the support from the media and Netizens," Wang told the Shanghai Daily. "It (the unfreezing of her assets) is a victory for the media and not just for me."

    "I will keep fighting with (Foxconn) to the end of the case," the reporter said.

    (Source: Shanghai Daily)