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Top Huawei executive detained in Canada, angering China

AFP  |  Ottawa 

A top and daughter of the founder of giant has been arrested in and faces to the United States, officials said Thursday, angering days into a trade war truce with the US.

The detention of Meng Wanzhou, Huawei's chief financial officer, comes after American authorities reportedly launched an investigation into suspected sanctions violations by Huawei, which was already under scrutiny by officials who deemed the company a national security threat.

The arrest stirred tensions just as the and agreed to a ceasefire in their trade spat while negotiators seek a deal within three months.

of her detention rippled through stock markets in Asia, particularly and Hong Kong, with tech firms among the worst hit. By lunch was 1.3 per cent lower while Hong Kong was 2.6 per cent off.

"is working creatively to undermine our national security interests, and the and our allies can't sit on the sidelines," US Senator in a statement linking the arrest to US sanctions against

"Sometimes Chinese aggression is explicitly state-sponsored and sometimes it's laundered through many of Beijing's so-called 'private' sector entities that are in bed with (President) Xi (Jinping)'s communist party," he added.

Meng was arrested in the western city of on December 1, Canada's ministry of justice said in a statement.

The ministry said the US is seeking her and she faces a bail hearing on Friday, adding it could not provide further details due to a publication ban that was sought by Meng, whose father, founder Ren Zhengfei, is a former Chinese


The arrest occurred on the same day that US and Xi struck the trade war truce at a summit in demanded Meng's release.

"The Chinese side firmly opposes and strongly protests over such kind of actions which seriously harmed the human rights of the victim," the embassy said in a statement.

"The Chinese side has lodged stern representations with the US and Canadian side, and urged them to immediately correct the wrongdoing and restore the personal freedom of Ms "

said it was unaware of any wrongdoing by Meng and was provided "very little information" about the charges.

"Huawei complies with all applicable laws and regulations where it operates, including applicable export control and sanction laws and regulations of the UN, US and EU," the company said in a statement.

reported in April that had opened an investigation into suspected violations of sanctions by Huawei.

said the company had been subpoenaed by the Commerce and Treasury Departments over alleged violations of Iran and sanctions.

Huawei is not the first Chinese telecoms equipment firm to face the ire of US authorities.

Earlier this year, the US imposed a seven-year ban on the sale of crucial US components to Chinese maker after finding it had failed to take action against staff who were responsible for violating trade sanctions against Iran and

The ban nearly killed the Chinese tech company, which said it was forced to cease major operations in May.

A month later, and reached a deal that would strike from the sanctions list -- just days after reportedly offered to ramp up purchases of American goods to help cut the yawning trade imbalance with the US.

American officials denied any connection between the two.

In exchange, agreed to pay a hefty USD 1 billion fine and put an additional USD 400 million in escrow in case of future violations.

It was also ordered to replace its board of directors and retain outside monitors.

The case showed that China is highly dependent on imports of US-made or and reinforced Beijing's need to become self-reliant on this

Huawei is one of the world's largest and services providers.

But despite global success, its US has been tightly constrained by worries it could undermine American competitors and that its cellphones and networking equipment, used widely in other countries, could provide with avenues for espionage.

In May, the said that devices from Huawei and ZTE posed an "unacceptable" security risk.

Personnel on US military bases are banned from buying equipment manufactured by the Chinese tech firms.

Over the summer, barred Huawei from providing for in the country over espionage fears.

followed suit in November, but said the issue was a technological one.

Britain's largest mobile provider too has joined the global ban on Huawei.

On Wednesday, BT announced it was removing Huawei's from its 4G cellular network, following a warning from the that singled out the Chinese company as a potential security risk.

Despite being essentially barred from the critical US market, Huawei surpassed to become the world's number two maker in the second quarter of this year.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, December 06 2018. 10:40 IST