The arrest of Meng Wanzhou, chief financial officer and daughter of the company's founder Ren Zhengfei, spooked Wall Street. China's Ministry of Foreign Affairs said officials have been contacted both in the US and Canada to demand Meng's release.
Geng Shuang, a spokesperson for the ministry, said her detention needed to be explained, and both countries had to "effectively protect the legitimate rights and interests of the person concerned".
The arrest does appear have some political motivation with Donald Trump’s national security adviser, John Bolton, being fully briefed before it took place. The charge is that Huawei violated sanctions on Iran is identical to one used against another Chinese company ZTE. It is worthwhile pointing out that if a US company breaks the law, the DoJ does not try to lock up one of the managers.
Senator Ben Sasse, a member of the Senate banking committee and a subcommittee on national security and international trade and finance said that China was “working creatively to undermine our national security interests, and the United States and our allies can’t sit on the sidelines”.
Huawei has said that it "complies with all applicable laws and regulations where it operates, including applicable export control and sanction laws and regulations".
Huawei CFO Meng Wanzhou is the daughter of Huawei’s founder, Ren Zhengfei and will appear in court later today.
James Andrew Lewis, director of the technology policy programme at the Center for Strategic and International Studies, warned that Meng's profile was like arresting Bill Gates' daughter and said China could retaliate.
He said that tech executives should avoid going to China right now.
The Chinese Embassy in Canada released a statement saying Meng was not in violation of Canadian or American law. China "firmly opposes and strongly protests" Meng's detention, the embassy said, calling the arrest a "wrongdoing" that "harmed the human rights of the victim".
Huawei, the biggest global supplier of network gear used by phone and internet companies, said in a statement that the company has "very little information regarding the charges" against Meng, who was changing flights in Vancouver when she was detained.
Chinese telecoms giant Huawei Technologies Co Ltd’s chief financial officer was arrested as part of a US investigation into an alleged scheme to use the global banking system to evade US sanctions against Iran.
The United States has been looking since at least 2016 into whether Huawei shipped US-origin products to Iran and other countries in violation of its export and sanctions laws, Reuters reported in April.
More recently, the probe has included whether the company used HSBC Holdings to conduct illegal transactions involving Iran, the people said.
If the mobile phone and telecoms equipment maker conducted such transactions and then misled HSBC about their true nature, it could be guilty of bank fraud, experts say.
The US press has focused on the fact that the Hong Kong-based Skycom, which tried to sell embargoed Hewlett-Packard computer equipment to Iran’s largest mobile-phone operator, had much closer ties to Huawei than previously known.
Meng served on the board of Skycom between February 2008 and April 2009, according to Skycom records. Several other past and present Skycom directors also appear to have connections to Huawei.