The Chinese telecom giant faces yet another severe blow to its reputation with the barrage of indictments the US released today.
The news: The US Department of Justice (DOJ) has brought criminal charges against Huawei in two different cases. The company and its CFO, Meng Wanzhou (the daughter of Huawei’s founder and president Ren Zhengfei), are accused of money laundering, bank fraud, wire fraud, and conspiracy. Huawei is also accused of conspiring to obstruct justice.
Speaking at a press conference announcing the charges, Christopher Wray, the head of the FBI (pictured right, above), said the charges “lay bare Huawei’s alleged blatant disregard for the laws of our country and standard global business practices.”
The details: In the first case, the DOJ says Huawei, Meng, and a Hong Kong–based company called Skycom Technologies committed wire fraud and other offenses in contravening US trade sanctions against Iran. In the second case, Huawei is accused of stealing trade secrets from T-Mobile USA. The charges relate to a civil lawsuit filed by T-Mobile in 2014, which alleged that Huawei had stolen information relating to a robot called Tappy that the US firm uses to test smartphones.
The DOJ also said it has filed paperwork for Meng’s extradition from Canada, where she was arrested in December and is now on bail. Huawei has denied any wrongdoing and has called for Meng’s release. Update: Huawei says it didn't commit "any of the asserted violations" leveled by the DOJ and that the allegations of stealing trade secrets were the subject of a settled civil lawsuit in which a jury had found "neither damages nor wilful and malicious conduct".
Dial H for Headaches: Huawei is under fire on other fronts, too. The company recently fired an employee in its Polish operation after he was accused of spying for China. And a growing number of countries, including Japan and Australia, have been urging local telecoms operators to shun Huawei’s 5G equipment because of fears that the Chinese government could use it for spying.
Things could get even worse. The White House is reportedly preparing an executive order that would bar US telecom firms from using equipment supplied by Huawei and ZTE, another Chinese firm. Draft legislation has been floated in Congress that would make it illegal for US companies to sell chips and other components to either firm.
Charm offensive: Huawei insists fears about spying are unfounded, and the company’s products are still popular in many markets. The notoriously secretive company has even been on a PR push recently to convince potential customers—and foreign reporters—that it can be trusted, making its little-seen founder available for interviews and giving tours of its new campus in Dongguan. But this charm offensive looks likely to be overshadowed by the current legal one.
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