Foxconn saw the shares of its firms listed in Shanghai and Taiwan plunge following a series of investigations launched by Beijing into Apple's most important partner and one of the largest employers in China.
Regulators are conducting tax audits and reviewing land use by Foxconn, the Taiwanese company that makes the vast majority of iPhones at factories in China, according to state media Global Times.
Hon Hai Precision Industry, Foxconn's public arm, said it will collaborate with authorities.
Hon Hai shares fell the most in more than three months yesterday.
Foxconn Industrial Internet, a major Shanghai-listed subsidiary, plunged its 10 percent daily limit - its biggest loss on record.
Meanwhile, Luxshare Precision Industry, a Foxconn rival based in China, gained as much as 4.9 percent.
Foxconn also has a listed subsidiary in Hong Kong - FIH Mobile - which focuses on the manufacturing and design of mobile phones, wireless telecommunication devices and electronics.
Tax authorities are conducting checks on Foxconn subsidiaries in Guangdong and Jiangsu provinces, state-run media reported, citing unidentified people with knowledge of the matter.
A report said officials are looking into the company's use of land in Henan and Hubei provinces.
Foxconn's Zhengzhou plant, known as iPhone City, is located in Henan.
The probe might arouse concerns of some foreign investors about the operations in China, especially when President Xi Jinping and his administration have been trying to signal support for the private sector, some observers said.
"The part of the leadership dealing with the economy and attracting foreign capital is not in the driving seat," said Alicia Garcia Herrero, chief Asia Pacific economist at Natixis.
The sources noted the audits come less than three months ahead of Taiwan's presidential election and amid Foxconn's drive to expand production outside China.
Foxconn founder Terry Gou, who stepped down as company chief in 2019, is standing as an independent for presidency.
By running, Gou might split the opposition vote, potentially ensuring a victory for Vice President Lai Ching-te, whom Beijing believes is a separatist, some reports said.
The investigation comes as the company has been pushing to diversify its manufacturing base, and reports said they viewed the audit as a "warning" to Foxconn.
