Markets slump after arrest of the Huawei executive Meng Wanzhou

The Chinese Embassy in Canada has issued a statement over the arrest of Meng Wanzhou

The Chinese Embassy in Canada has issued a statement over the arrest of Meng Wanzhou

Sharp losses in technology shares pulled down benchmark stock indexes in China and Hong Kong today, after the global chief financial officer of Chinese technology giant Huawei was arrested in relation to alleged violations of USA sanctions.

"Wanzhou Meng was arrested in Vancouver on December 1st".

Details of the arrest have not been released, but the USA has applied to extradite CFO Meng Wanzhou from Vancouver, with a bail hearing set for tomorrow.

Canadian Justice Department spokesman Ian McLeod said the U.S.is seeking Meng's extradition, but couldn't provide further details about the case because of the publication ban in effect at Meng's request. The company said it wasn't aware of any wrongdoing by the CFO and that authorities in both countries will "ultimately reach a just conclusion". In a report released by the U.S. Permanent Select Committee on Intelligence in 2012, Huawei and ZTE Corp. were tagged as potential threats to U.S. security interests.

The shock arrest of Meng Wanzhou, who is also Huawei Technologies Co Ltd's chief financial officer, is riling authorities in Beijing and raises fresh doubts over a 90-day truce on trade struck between Presidents Donald Trump and Xi Jinping on the day she was detained.

New Zealand and Australia have stopped telecom operators from using Huawei's equipment in new 5G networks because they are concerned about possible Chinese government involvement in their communications infrastructure. Ren is a former Chinese military official who founded the company more than 30 years ago.

Huawei Technologies, launched in 1987 in Shenzhen China, has been the largest telecommunication equipment producer in the world since 2012.

News of Meng's arrest comes in the wake of reports in April of 2018 that US prosecutors based in NY were investigating the possible violation of USA sanctions against selling USA -origin products to Iran.

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He has since been proved right with revenue projected to hit 655.9 billion yuan (US$102.2 billion) this year, a jump of 9.3% compared to 2017.

President Donald Trump restored access after ZTE agreed to pay a $1 billion fine, replace its executive team and embed a USA -chosen compliance team in the company.

In its statement Wednesday, Huawei said the company complies with all laws and regulations in the countries where it operates, including applicable export control, sanction laws and regulations of the United Nations, the United States and the European Union.

That means the US has less leverage over Huawei than over ZTE and some other Chinese companies.

Huawei derives around half of its revenue from supplying equipment to telecoms carriers around the world.

The company had been investigated by United States intelligence, who deemed it a national security threat.

Huawei has repeatedly denied the insinuation and says it's owned by Ren and its own employees.

Analysts said it's more likely the case proceeded separately from the trade talks as part of Trump's efforts to step up prosecutions against Chinese companies that conduct economic espionage and violate sanctions.

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