Arrest of Huawei 'heiress' throws rare spotlight on family

Kenny Grant
December 6, 2018

Security concerns have hampered Huawei's business in the acquisitions were rejected and companies warned not to source network equipment from Huawei or ZTE.

An anonymous Canadian law-enforcement source told The Globe and Mail that the United States is alleging Meng tried to evade USA sanctions against Iran.

She now faces possible extradition to the U.S. This time around, however, the issue is not a potential national security risk, but rather accusations that CFO Wanzhou Meng violated U.S. sanctions regarding Iran.

Huawei's chief financial officer, Meng Wanzhou, was arrested Saturday in Vancouver, Canada.

The detention of Ms Meng threatens to scuttle the temporary detente reached by US President Donald Trump and his Chinese counterpart Xi Jinping at the G20 talks in Argentina to halt new trade tariffs for 90 days as the two countries negotiate.

"We are closely watching the developments in Asia after reports that Canada has arrested the Huawei CFO facing USA extradition for allegedly violating Iran sanctions".

While Meng's arrest comes at a delicate time in U.S.

Lu Xiang, an expert on China-U.S. relations at the state-backed Chinese Academy of Social Sciences, said the arrest of Meng is "extremely shocking".

Huawei said Ms Meng, the daughter of founder Ren Zhengfei, was detained while transferring between flights.

"Americans are grateful that our Canadian partners have arrested the Chief Financial Officer of a giant Chinese telecom company for breaking USA sanctions against Iran", he said.

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A woman uses her mobile phone in front of an LED display board of Huawei at the Beijing International Consumer Electronics Expo in China on July 9.

She appeared in court on Wednesday, and is due back for a bail hearing on Friday.

Huawei said it had little information about the charges and was "not aware of any wrongdoing by Ms Meng". "Huawei complies with all applicable laws and regulations where it operates, including applicable export control and sanction laws and regulations of the UN, US and European Union", the firm said in a statement.

USA stocks tumbled in early trading Thursday following a sell-off in overseas markets, knocking more than 450 points off the Dow Jones Industrials Average.

The Chinese Embassy in Canada condemned the detention of Ms Meng denying she had violated Chinese or U.S. laws. But ZTE (ZTCOF), a Chinese tech firm that was temporarily crippled by a USA export ban earlier this year, slumped almost 9%.

If there is no deal at the end of that period, the USA will increase tariffs on US$200 billion of Chinese goods from 10 per cent to 25 per cent.

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

China urged Canada and the United States to "clarify" the reason for Meng's arrest and demanded her release. "We think this will force China to take a more aggressive and confrontational approach with the U.S.". It surpassed Apple in smartphone sales in the second quarter of this year, leaving it behind only market leader Samsung.

United States media have also reported that Huawei is under investigation for potential violations of USA sanctions against Iran. Australia and New Zealand recently banned Huawei from building 5G networks in their countries.

Senator Chris Van Hollen, a Maryland Democrat, said Wednesday night that Huawei and ZTE "are two sides of the same coin - Chinese telecommunications companies that represent a fundamental risk to American national security". Huawei seems much stronger commercially than ZTE, with the biggest research and development budget of any Chinese company and a vast portfolio of patents, making it less dependent on American suppliers.

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