Huawei's chief financial officer arrested in Canada

2018-12-06 01:48:11

Chinese telecommunications giant Huawei says it has been given little information on the arrest in Canada of its chief financial officer Meng Wanzhou, daughter of company founder Ren Zhengfei.

Meng was detained at the request of the United States, which was seeking her extradition to face "unspecified charges", when she was transferring flights in Canada, the company said in a statement.

The Globe and Mail reported the arrest was in relation to sanctions-busting in Iran – rather than any concerns about espionage by the Chinese firm – which has annual revenues of US$93 billion (NZ$135b) and 180,000 employees and is deeply embedded with many New Zealand telcos.

But Huawei said in a statement that it had been provided "very little information regarding the charges" and was not aware of any wrongdoing by Meng. "The company believes the Canadian and US legal systems will ultimately reach a just conclusion," it said.

US Justice Department spokesperson Ian McLeod said Meng was arrested in Vancouver on Saturday. "She is sought for extradition by the United States and a bail hearing has been set for Friday," he said.

"As there is a publication ban in effect, we cannot provide any further detail at this time. The ban was sought by Ms Meng."

Separately, the BBC reported that British telco BT would not use Huawei's equipment in its 5G mobile network. BT still planned to use Huawei phone mast antennas and some other products from Huawei, it said.

BT is also removing Huawei equipment from the core of its existing 3G and 4G networks, the BBC reported.

2degrees is the only New Zealand mobile operator that uses Huawei to supply its core mobile network.

Spark also uses network access equipment from Huawei in cellphone towers – but not in its core mobile network – and Spark spokesman Andrew Pirie said that meant BT's decision had no direct implications for it.

Last week, New Zealand's Government Communications Security Bureau (GCSB) rejected a proposal from Spark under which it would have used network access equipment from Huawei to build a 5G network, which it wants to have running in 2020.

It is understood a National Intelligence Law passed by China last year that obliges Chinese citizens and companies anywhere in the world to cooperate with its security services was one reason for the block.

The United States and Australian governments have long expressed concerns about the security implications of using telecommunications equipment from China.

The US has also been investigating the alleged shipping of US-made products to Iran and other countries by Huawei since 2016, an activity that would violate US sanctions laws.

Huawei New Zealand deputy chief executive Andrew Bowater said regarding the developments in Britain, that BT had inherited its mobile networks that contained Huawei equipment at their core as a result of its acquisition of mobile operator EE in 2016.

"Since the beginning of this partnership, BT has operated on a principle of different vendors for different network layers. This agreement remains in place today.

"Since it acquired EE in 2016, the BT Group has been actively bringing EE's legacy network architecture in line with this long-standing agreement. This is a normal and expected activity, which we understand and fully support," he said.

Bowater said BT had noted that Huawei remained "an important equipment provider and a valued innovation partner".

"We have already completed a number of successful 5G trials across different sites in London and we will continue to work with BT in the 5G era."

Bowater said a proposed $400 million investment in New Zealand that Huawei announced after Ren met with former prime minister Bill English in Wellington in March 2017 was "up in the air".

The plans included building a cloud computing centre, and sourcing more products and services locally.

"Until we have some clarity around the future we can't make any bold investment decisions," he said. "Everything is up in the air until we get some clarity."

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