By Mark Fairlie.

The daughter of the founder of one of the world’s biggest firms, Huawei, has been arrested on suspicion of involvement in providing US-origin goods to countries sanctioned by America.

China has protested to Canada, the country in which she was arrested, that she should be released immediately.  The United States is requesting chief financial officer and deputy chair Meng Wanzhou’s extradition.

What is Huawei?

Founded by an ex-army officer, Ren Zhengfei, with $3,000 parachute payment from the Army, Huawei is a China-based telecommunications and electronics giant employing 180,000 people.

According to the Financial Times, the company expects to sell 200m smartphones in 2000, surpassing Apple, and it sold $47.4bn worth of goods and services in the first 6 months of 2018.

In addition to its core smartphone handset business, the company provides cloud computing for global telecommunications companies, data centres, fixed-line communications, wireless communications, and network infrastructure (source: Huawei)

Who is Meng Wanzhou?

Meng Wanzhou is the daughter of founder Ren Zhengfei. After leaving University where she gained a master’s degree in accountancy, she worked for China Construction Bank before joining her father’s business as a reception where her main responsibilities were “taking phone calls, typing, and producing product catalogues”.

Ms Wanzhou rose quickly through the ranks of Huawei, becoming director of international account, then CFO of Huawei Hong Kong, and then president of the accounting management department for the firm. (source: Straits Times)

Why has she been arrested?

According to BBC News, Ms Wanzhou was arrested following an investigation into potential sanctions violations. She was arrested in Canada at the request of the United States under suspicion that Huawei traded with Iran, currently subject to sanctions following the election of President Donald Trump.

The Guardian and Fortune report that US authorities have been investigating Huawei because of suspicions that the company is “shipping US-origin products to Iran and other countries in violation of US export and sanctions laws”.

China and the United States have been involved in a trade war for a number of months with each company imposing ever higher tariffs on imports from the other country.

Guo Ping, CEO of Huawei, posted on Thursday 6th December that “(t)here has been very little information provided to Huawei on the specific allegations. Huawei is not aware of any misconduct by Ms Meng” (source: Daily Mail via AP).

Why is Huawei controversial?

Huawei’s finance director facing extradition to the US

The company’s alleged involvement in the breaking of sanctions to US-embargoed countries is one of a number of controversies the company is currently contending with.

The Seattle Times reported that Huawei was found guilty of industrial espionage against T-Mobile in the United States and it ended up paying the claimant damages of $4.8bn.

There is concern among military forces and security agencies about the alleged closeness of Huawei to the Chinese government and army. In Feb 2018, the Verge reported that “the heads of six major US intelligence agencies have warned that American citizens shouldn’t use products and services made by Chinese tech giants Huawei and ZTE”.

The chiefs expressed concern that the company could “maliciously modify or steal information” and that they would have the ability to carry out “undetected espionage”.