Huawei founder’s daugh­ter held

Huawei Tech­nolo­gies CFO’s ar­rest in Canada on US re­quest clouds trade truce

The Star Malaysia - StarBiz - - Foreign News -

VAN­COU­VER: The daugh­ter of Chi­nese tech gi­ant Huawei’s founder has been ar­rested in Canada and is fac­ing ex­tra­di­tion to the United States, deal­ing a blow to hopes of an eas­ing of Sino-US trade ten­sions and rock­ing global stock mar­kets.

The shock ar­rest of Meng Wanzhou ( pic), who is also Huawei Tech­nolo­gies Co Ltd’s chief fi­nan­cial of­fi­cer, raises fresh doubts over a 90-day truce on trade struck be­tween Pres­i­dents Don­ald Trump and Xi Jin­ping on Satur­day – the day she was de­tained.

The ar­rest is re­lated to vi­o­la­tions of US sanc­tions, a source said. Reuters was un­able to de­ter­mine the pre­cise na­ture of the vi­o­la­tions.

The ar­rest and any po­ten­tial sanc­tions on the world’s sec­ond big­gest smart­phone maker could have ma­jor reper­cus­sions on the global tech­nol­ogy sup­ply chain. Shares in Asian sup­pli­ers to Huawei, which also counts Qual­comm Inc and In­tel among its ma­jor sup­pli­ers, tum­bled yes­ter­day.

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 US 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.

Sources told Reuters in April that US au­thor­i­ties have been prob­ing Huawei, the world’s largest tele­coms equip­ment maker, since at least 2016 for al­legedly ship­ping US-ori­gin prod­ucts to Iran and other coun­tries in vi­o­la­tion of US ex­port and sanc­tions laws.

Huawei con­firmed the ar­rest in a state­ment and said that it has been pro­vided lit­tle in­for­ma­tion of the charges, ad­ding that it was ”not aware of any wrong­do­ing by Meng”.

She was de­tained when she was trans­fer­ring flights in Canada, it added.

China’s em­bassy in Canada said it res­o­lutely op­posed the ar­rest and called for Meng’s im­me­di­ate re­lease.

In April, the sources told Reuters the US Jus­tice Depart­ment probe was be­ing han­dled by the US at­tor­ney’s of­fice in Brook­lyn.

The US Jus­tice Depart­ment on Wed­nes­day de­clined to com­ment. A spokesman for the US at­tor­ney’s of­fice in Brook­lyn also de­clined to com­ment.

The ar­rest drew a

Chi­nese so­cial me­dia.

A user of China’s Twit­ter-like Weibo platform said Chi­nese should boy­cott prod­ucts made by US tech gi­ant Ap­ple Inc and in­stead buy Huawei prod­ucts to show sup­port for one of China’s na­tional cham­pi­ons. sharp re­sponse on

Jia Wen­shan, a pro­fes­sor at Chap­man Univer­sity in Cal­i­for­nia, said the ar­rest was part of a broader geo-political strat­egy from the Trump ad­min­is­tra­tion to counter China and it “runs a huge risk of de­rail­ing the US-China trade talks”.

Mei Xinyu, a re­searcher at a think tank run by the Com­merce Min­istry, wrote in an ar­ti­cle on the of­fi­cial Peo­ple’s Daily Over­seas Edi­tion’s WeChat ac­count that the ar­rest was a warn­ing that the Trump ad­min­is­tra­tion might aban­don its deal with China.

“We can be sure that in the near fu­ture a bumpy road of fights fol­lowed by talks will be the norm of China-US re­la­tions,” Mei wrote. ”China must be­come ac­cus­tomed to this new en­vi­ron­ment of strug­gle and treat all of the US gov­ern­ment’s prom­ises with cau­tion.”

While Meng’s ar­rest comes at a del­i­cate time in US-China re­la­tions, it was not clear if the tim­ing was co­in­ci­den­tal.

Arthur Kroe­ber, founder of Gavekal Drago­nomics, said it was un­likely that Bei­jing would re­tal­i­ate in kind against the lo­cal US busi­ness com­mu­nity, whose in­ter­ests have partly over­lapped with China’s in the trade war and been a source of lever­age for Bei­jing.

“You can play hard­ball with a small coun­try but you can’t do it with the United States,” he said. “Ac­tu­ally it hurts them to make life dif­fi­cult” for US com­pa­nies.

The probe of Huawei is sim­i­lar to one that threat­ened the sur­vival of China’s ZTE Corp, which pleaded guilty in 2017 to vi­o­lat­ing US laws that re­strict the sale of Amer­i­can-made tech­nol­ogy to Iran.

Ear­lier this year, the United States banned Amer­i­can firms from sell­ing parts and soft­ware to ZTE, which then paid US$1bil this sum­mer as part of a deal to get the ban lifted.

It was not im­me­di­ately clear how Huawei’s busi­ness op­er­a­tions might be af­fected by the ar­rest.

In Jan­uary 2013, Reuters re­ported that Hong Kong-based Sky­com Tech Co Ltd, which at­tempted to sell em­bar­goed Hewlett-Packard com­puter equip­ment to Iran’s largest mo­bile­phone op­er­a­tor, had much closer ties to Huawei than 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, ac­cord­ing to Sky­com records filed with Hong Kong’s Com­pa­nies Reg­istry.

Sev­eral other past and present Sky­com di­rec­tors ap­pear to have con­nec­tions to Huawei.

The news about the ar­rest comes the same day Bri­tain’s BT Group said it was re­mov­ing Huawei’s equip­ment from the core of its ex­ist­ing 3G and 4G mo­bile op­er­a­tions and would not use the Chi­nese com­pany in cen­tral parts of the next net­work.

Huawei has said it com­plies with all ap­pli­ca­ble ex­port con­trol and sanc­tions laws and US and other reg­u­la­tions.

Meng’s ar­rest drew a Washington.

US se­na­tor Ben Sasse praised the move and said that it was “for break­ing US sanc­tions against Iran”.

US stock fu­tures and Asian shares tum­bled as news of the ar­rest height­ened the sense a ma­jor col­li­sion was brewing be­tween the world’s two largest eco­nomic pow­ers, not just over tar­iffs but also over tech­no­log­i­cal hege­mony.

Shares of Huawei sup­pli­ers slumped yes­ter­day as in­vestors fret­ted over the ar­rest. Sam­sung Elec­tron­ics fell 2.3%, while Chi­na­soft In­ter­na­tional Ltd sank as much as 13%. — Reuters quick re­ac­tion in

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