Economy

Huawei finance chief Meng Wanzhou arrested in Canada

Huawei finance chief Meng Wanzhou arrested in Canada

Her arrest, revealed late on Wednesday by Canadian authorities, is related to US sanctions, a person familiar with the matter said.

Who has taken action against telecom giant Huawei and why hasn't Canada? .

Huawei is the world's largest supplier of telecommunications network equipment and second-biggest maker of smartphones, with revenue of about $92 billion a year ago.

Meanwhile, the substantially more independent South China Morning Post reported today that Meng and her father recently told Huawei employees that strict compliance with regulations was sometimes not financially feasible and could be avoided.

News of her detention rippled through Asian stock markets, with Shanghai and Hong Kong falling and tech firms among the worst hit.

Huawei is already under intense scrutiny from US and other western governments about its ties to the Chinese government, driven by concerns it could be used by the state for spying. No evidence has been produced publicly and the firm has repeatedly denied the claims. "The company believes the Canadian and US legal systems will ultimately reach a just conclusion", said a statement from Huawei. Trump and Xi had dined in Argentina on December 1 at the G20 summit.

Huawei, which generated $93 billion in revenue a year ago, confirmed the arrest in a statement.

"The company has been provided very little information regarding the charges and is not aware of any wrongdoing by Ms. Meng", the statement said.

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

"We have made solemn representations to Canada and the U.S., demanding that both parties immediately clarify the reasons for the detention, and immediately release the detainee to protect the person's legal rights", foreign ministry spokesperson Geng Shuang told reporters.

In June 2014, Chinese businessman Su Bin was picked up on a USA warrant in Canada, where he had been attempting to establish residency.

An HSBC spokesperson declined to comment on Thursday. A spokesman for the USA attorney's office in Brooklyn also declined to comment.

China's foreign ministry urged Canada and the United States to "clarify" the reason for Meng's detention.

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The two sides had agreed to meet and resolve their differences within 90 days, but Meng's arrest has thrown this into doubt, bringing back the spectre of huge tariffs and the global economic damage they would cause.

The Globe and Mail newspaper, citing law enforcement sources, said Meng Wanzhou is accused of trying to evade United States trade curbs on Iran.

"This is what you call playing hard ball", said Michael Every, head of Asia financial markets research at Rabobank in Hong Kong.

Are these issues related to the U.S. One of those people is Senator Ben Sasse (R-NE), who said the United States "can't sit on the sidelines" while China undermines national security with its actions.

However, the topic ranked only 31st among trending items on Weibo as of Thursday afternoon, with many discussion threads apparently blocked, which is not unusual on China's heavily censored Internet. Is the timing of the arrest deliberate?

David Mulroney, a former Canadian ambassador to China, said US and Canadian business executives could face reprisals in China. Meng, it said, was "not violating any American or Canadian law". Trump restored access after ZTE agreed to pay a $1 billion fine, replace its executive team and embed a US -chosen compliance team in the company.

The Wall Street Journal reported in April that the US Department of Justice had opened an investigation into suspected violations of Iran sanctions by Huawei.

News of the arrest came the same day Britain's BT Group BT.L 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.

Canadian authorities arrested Meng Wanzhou, the chief financial officer of Huawei and the daughter of its founder, on Saturday as she was changing planes.

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

Meng's arrest drew a quick reaction in Washington.

Wasn't another Chinese company also accused of Iran sanctions violations? He added: "Sometimes Chinese aggression is explicitly state-sponsored and sometimes it's laundered through many of Beijing's so-called "private" sector entities".