Canadian Authorities Arrest CFO of Huawei Technologies at U.S. Request -- 2nd Update

By Kate O'Keeffe and Stu Woo

Canadian authorities in Vancouver have arrested Huawei Technologies Co.'s chief financial officer at the request of the U.S. government for alleged violations of Iranian sanctions, the latest move by Washington to crack down on the Chinese cellular-technology giant.

A spokesman for Canada's justice department said Meng Wanzhou was arrested in Vancouver on Dec. 1 and is sought for extradition by the U.S. A bail hearing has been tentatively scheduled for Friday, according to the spokesman. Ms. Meng, the daughter of Huawei's founder, Ren Zhengfei, serves as the company's CFO and deputy chairwoman.

Ms. Meng's arrest comes amid a year-long U.S. government campaign against a company it views as a national-security threat. In the past year, Washington has taken a series of steps to restrict Huawei's business on American soil and, more recently, launched an extraordinary international outreach campaign to persuade allied countries to enact similar curbs.

BT Group PLC, Britain's largest wireless carrier, said it was removing Huawei equipment from its systems that transfer calls and internet traffic. The company didn't say why it was disclosing the move now.

The U.S. is seeking Ms. Meng's extradition so as to have her appear in federal court in the Eastern District of New York, according to people familiar with the matter. A Huawei spokesman had no immediate comment on Ms. Meng's arrest Wednesday.

The Wall Street Journal reported in April that the Justice Department had launched a criminal probe into Huawei's dealings in Iran, following administrative subpoenas on sanctions-related issues from both the Commerce Department and the Treasury Department's Office of Foreign Assets Control.

In 2007, Ms. Meng served as a board secretary for a Huawei holding company that owned Skycom Tech, a Hong Kong-based company with business in Iran and employees who said they worked for "Huawei-Skycom," according to a person familiar with the matter.

U.S. authorities have suspected Huawei's alleged involvement in Iranian sanctions violations since at least 2016, when the U.S. investigated ZTE Corp., Huawei's smaller Chinese rival, over similar violations. The Commerce Department released internal ZTE documents that showed the company studied how a rival identified only as "F7" had conducted similar business.

A ZTE representative didn't immediately respond to a request for comment.

The document, dated August 2011, said F7's proposal to acquire U.S. company 3Leaf was opposed by Washington. That identified the company F7 as Huawei, which tried to acquire 3Leaf in 2010, only to back away after a U.S. national-security panel recommended against approving the deal.

Aruna Viswanatha, Nicole Hong and Paul Vieira contributed to this article.

Write to Kate O'Keeffe at kathryn.okeeffe@wsj.com and Stu Woo at Stu.Woo@wsj.com

(END) Dow Jones Newswires

December 05, 2018 18:37 ET (23:37 GMT)

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