Huawei chief financial officer, Wanzhou Meng, has been arrested by Canadian authorities at the request of the U.S. Justice Department, the company confirmed to The Information. Authorities are seeking Ms. Meng’s extradition to the U.S. for the phone giant’s alleged violations of U.S. trade sanctions against Iran. The arrest could have massive consequences. Ms. Meng not only is one of the most senior executives but also is the daughter of Huawei’s powerful founder Ren Zhengfei, a former People’s Liberations Army engineer who started Huawei three decades ago.
Any action against Huawei by the U.S. government based on alleged export control violations would have an enormous impact on the global telecom industry and tech supply chain. When the U.S. punished Huawei’s smaller Chinese peer ZTE for similar violations earlier, it affected many ZTE customers and suppliers and fueled tensions between the two governments.
Huawei, which is much bigger than ZTE, is one of the world’s largest suppliers of equipment for building telecom networks, and its clients include major carriers all over the world expect the U.S. where its telecom business has effectively been banned. Huawei also became the world’s second-largest smartphone vendor after Samsung by shipment volume in the second quarter by surpassing Apple, according to IDC. In a statement, Huawei said it “has been provided very little information regarding the charges and is not aware of any wrongdoing by Ms. Meng. The company believes the Canadian and US legal systems will ultimately reach a just conclusion.”