World

Top Huawei executive detained in Canada, angering China

Markets spooked after CFO's arrest in relation to violation of US sanctions

WASHINGTON Canada has arrested Huawei's global chief financial officer in Vancouver, where she is facing extradition to the US, Canada's Department of Justice said on Wednesday.

The arrest is related to violations of US sanctions, a person familiar with the matter said. Reuters was unable to determine the nature of the violations.

Meng Wanzhou, who is one of the vice chairs on the Chinese technology company's board and the daughter of company founder Ren Zhengfei, was arrested on Dec 1 and a court hearing has been set for today, a Canadian Justice Department spokesman said.

Huawei confirmed the arrest and said that it has been provided little information of the charges against Meng, adding that it was "not aware of any wrongdoing by Ms Meng."

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

The arrest could drive a wedge between China and the US just days after President Donald Trump and President Xi Jinping held a meeting in Argentina where they agreed to steps to resolve a brewing trade war.

US authorities have been probing Huawei, one of the world's largest makers of telecommunications network equipment, since at least 2016 for allegedly shipping US-origin products to Iran and other countries in violation of US export and sanctions laws, sources told Reuters in April.

The US Justice Department declined to comment.

In January 2013, Reuters reported that a Hong Kong-based firm that attempted to sell embargoed Hewlett-Packard computer equipment to Iran's largest mobile-phone operator had much closer ties to China's Huawei Technologies than was previously known.

The news of Meng's arrest comes on 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 said Meng was detained when she was transferring flights in Canada.

The handset and telecommunications equipment maker said it complies with all applicable export control and sanctions laws and US and other regulations.

The arrest drew a quick reaction in Washington.

US Republican senator Ben Sasse praised the action and said that it was "for breaking US sanctions against Iran."

He added: "Sometimes Chinese aggression is explicitly state-sponsored and sometimes it's laundered through many of Beijing's so-called 'private' sector entities."

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

While investors initially greeted the trade ceasefire reached in Argentina with relief, the mood has quickly soured on scepticism that the two sides can reach a substantive deal. - REUTERS

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