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Huawei CFO's arrest in Canada, likely extradition to US anger China, rattle market

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

Thursday December 6, 2018 6:58 PM, ummid.com & Agencies

Meng Wanzhou  Arrested

Beijing/Ottawa: China reacted angrily Thursday after a top executive and daughter of the founder of Chinese telecom giant Huawei was arrested in Canada following a US extradition request, threatening to rattle a trade war truce with the United States.

The detention of Meng Wanzhou, Huawei's Chief Financial Officer (CFO), comes after American authorities reportedly launched an investigation into suspected Iran sanctions violations by Huawei, which was already under scrutiny by US intelligence officials who deemed the company a national security threat, according to AFP.

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

“Meng Wanzhou is sought for extradition by the United States, and a bail hearing has been set for Friday,” Justice Department spokesman Ian McLeod said in a statement to the Canadian newspaper. “As there is a publication ban in effect, we cannot provide any further detail at this time. The ban was sought by Ms Meng.”

Meng's arrest rattled markets in Asia with Hong Kong-listed shares in ZTE falling 6.1 per cent while the company’s Shenzhen-listed stock dropped 5.2 per cent. AAC Technologies fell 6.4 per cent, Sunny Optical dropped 5.5 per cent as China’s CSI 300 index of major Shanghai and Shenzhen-listed companies fell 2.16 per cent. Japan's Topix index dropped 1.82 per cent, while Hong Kong's Hang Seng dropped 2.5 per cent and South Korea's KOSPI gauge fell 1.55 per cent.

Meng was arrested in the western city of Vancouver on December 1, Canada's ministry of justice said in a statement on Wednesday, prompting China's embassy to say it had "seriously harmed the human rights of the victim".

The ministry said the US is seeking her extradition 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, Huawei founder Ren Zhengfei, is a former Chinese People's Liberation Army engineer.

Huawei, which overtook Apple as the world's number two smartphone maker this year, said it was unaware of any wrongdoing by Meng and was provided "very little information" about the charges. In a statement, the telecom giant said Meng's extradition was prompted by unspecified charges in the Eastern District of New York when she was transferring flights in Canada.

"The company has been provided very little information regarding the charges and is not aware of any wrongdoing by Ms Meng. The company believes the Canadian and US legal systems will ultimately reach a just conclusion," Huawei said.

The Shenzhen-based company said it 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."

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