Huawei founder's daughter arrested on US request, puts trade war truce in doubt

Published: December 06, 2018 12:47:10 | Updated: December 07, 2018 22:01:17


Reuters file photo used for illustrative purpose only

The daughter of Chinese tech giant Huawei’s founder has been arrested in Canada and is facing extradition to the United States, dealing a blow to hopes of any easing of Sino-US trade tensions and rocking global stock markets.

The shock arrest of Meng Wanzhou, who is also Huawei Technologies Co Ltd’s chief financial officer (CFO), is riling authorities in Beijing and raises fresh doubts over a 90-day truce on trade struck between Presidents Donald Trump and Xi Jinping on the day she was detained, reports Reuters.

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

The arrest and any potential sanctions on the world’s second biggest smartphone maker could have major repercussions on the global technology supply chain. Shares in Asian suppliers to Huawei, which also counts Qualcomm and Intel among its major suppliers, tumbled on Thursday.

Meng, one of the vice chairs on the company’s board and the daughter of company founder Ren Zhengfei, was arrested on December 1 at the request of US authorities and a court hearing has been set for Friday, a Canadian Justice Department spokesman said. Trump and Xi had dined in Argentina on December 1 at the G20 summit.

Sources told Reuters in April that US authorities have been probing Huawei, the world’s largest telecoms equipment maker, since at least 2016 for allegedly shipping US-origin products to Iran and other countries in violation of US export and sanctions laws.

Huawei confirmed the arrest in a statement and said that it has been provided 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, it added.

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

In April, the sources told Reuters the US Justice Department probe was being run out of the US attorney’s office in Brooklyn.

The US Justice Department on Wednesday declined to comment. A spokesman for the US attorney’s office in Brooklyn also declined to comment.

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

Shares of Huawei suppliers slumped on Thursday as investors fretted over the arrest. Samsung Electronics fell 2.3 per cent, while Chinasoft International Ltd sank as much as 13 per cent.

 

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