Chinese Telecom Giant Huawei CFO Arrested in Canada

Huawei worldwide chief financial officer has arrested in Vancouver Canada, where she is facing extradition to the United States, Canada’s Department of Justice said on Wednesday.

Huawei logo on a building

The arrest is linked to infringement of U.S. sanctions, a person familiar with the matter said. The exact nature of the violations was not determined.

Sources stated in April that U.S. authorities have been looking into Huawei, one of the world’s biggest creators of telecommunications network equipment, since at least 2016 for reportedly shipping U.S.-origin products to Iran and other nations, a move that breaches U.S. export and sanctions laws.

Meng Wanzhou who is one of the vice chairs on the company’s board and the daughter of Huawei founder Ren Zhengfei, was arrested on Dec. 1 and a court hearing has been set of Friday, said the spokesperson for the Canadian Justice Department.

Huawei confirmed the arrest and said it has little information of the charges, adding that it was “not aware of any wrongdoing by Ms. Meng.” She was detained when she was transferring flights in Canada.

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

The arrest might drive a wedge between China and the United States just days after President Donald Trump and President Xi Jinping held a gathering in Argentina where they consented to steps to solve a trade war.

The sources said in April the U.S. Justice Department probe is being run out of the U.S. attorney’s office in Brooklyn.

The U.S. Justice Department on Wednesday refused to comment. A spokesperson for the U.S. attorney’s office in Brooklyn also refused to comment.

The arrest drew a sharp response on Chinese social media.

The probe of Huawei is alike to one that threatened the survival of China’s ZTE Corp, which plead guilty in 2017 for violating U.S. laws that restricted the sale of American-made technology to Iran.

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

In January 2013, a news agency reported that Hong Kong-based Skycom Tech Co Ltd, which endeavored to sell embargoed Hewlett-Packard computer equipment to Iran’s biggest mobile-phone operator, had much closer ties to Huawei than formerly 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 also seem to have connections to Huawei.

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

Meng’s arrest drew a rapid response in Washington.

U.S. Senator Ben Sasse commended the action and said that it was “for breaking U.S. sanctions against Iran.” He added that “Sometimes Chinese aggression is explicitly state-sponsored and sometimes it’s laundered through many of Beijing’s so-called ‘private’ sector entities.”

U.S. stock futures and Asian shares fell as news of the arrest finely tuned the sense a major collision was brewing between the world’s two biggest economic powers, not just over tariffs but also over technological dominance.

Stocks of Huawei suppliers sagged on Thursday as investors worried over the arrest. Samsung Electronics tumbled 2.3 percent, while Chinasoft International Ltd sank as much as 13 percent.

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