Huawei’s Meng Wanzhou, founder’s daughter and CFO, arrested in Canada

The arrest and the subsequent extradition to the United States is one of several headwinds facing Huawei. Countries across the world are taking steps to bar the usage of Huawei’s equipment from their core existing and future mobile operations.

In a development with widespread ramifications, Meng Wanzhou, the daughter of Huawei’s founder who is also the Chinese tech giant’s Chief Financial Officer, has been arrested in Canada and is facing extradition to the United States.

As per a source familiar with the matter at hand, the arrest is related to violations of U.S. sanctions. We will report the precise nature of the violations once they are made available.

The arrest could lead to potential sanctions on Huawei, the world’s second biggest smartphone maker, could have significant repercussions on the global technology supply chain. Shares of Qualcomm Inc and Intel, which count Huawei as their suppliers fell on Thursday.

Meng, one of the vice chairs on the company’s board and the daughter of company founder Ren Zhengfei, was arrested on Dec. 1 at the request of U.S. authorities and a court hearing has been set for Friday, a Canadian Justice Department spokesman said. Trump and Xi had dined in Argentina on Dec. 1 at the G20 summit.

According to sources, U.S. authorities have been probing Huawei since at least 2016 for allegedly shipping U.S.-origin products to Iran as well as other countries in violation of U.S. export and sanctions laws.

Huawei has confirmed the arrest and stated it has been provided little information on the charges; it went on to add, it was “not aware of any wrongdoing by Ms. Meng”.

Meng was detained when she was transferring flights in Canada.

The U.S. probe of Huawei is similar to the one the U.S. conducted on China’s ZTE Corp, which pleaded guilty in 2017 to violating U.S. laws. ZTE paid $1 billion this summer to get the U.S. ban lifted.

As reported by Reuters in 2013, “Hong Kong-based Skycom Tech Co Ltd, which attempted to sell embargoed Hewlett-Packard computer equipment to Iran’s largest mobile-phone operator, had much closer ties to Huawei than was previously known. Meng, who also has gone by the English names Cathy and Sabrina, served on the board of Skycom between February 2008 and April 2009”.

This information has been filed by Skycom with the Hong Kong’s Companies Registry.

Further, several other past and present Skycom directors also appear to have connections with Huawei.

Meng’s arrest has drawn praise in Washington with U.S. Senator Ben Sasse praising the move saying the arrest was “for breaking U.S. sanctions against Iran.” He went on to add, “Sometimes Chinese aggression is explicitly state-sponsored and sometimes it’s laundered through many of Beijing’s so-called ‘private’ sector entities.”

On Thursday, shares of Huawei suppliers dipped with Samsung Electronics falling by 2.3%, and Chinasoft International Ltd’s shares sinking by 13%.

Categories: Creativity, Economy & Finance, Entrepreneurship, HR & Organization, Regulations & Legal, Strategy

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