Should the owner of the factory be informed about the violations of the branch manager who sells at a reduced price to himself, or should one keep silent about that?

The fact that the branch manager owns his workplace does not grant him absolute authority. Rather, there must be an agreement between him and the factory owner that defines the nature of their relationship. It is the questioner's duty to inform the factory owner that the branch manager is selling to himself at a lower price, as he is responsible for the sales invoices and is obliged to report any violations.