Huawei Now Facing Criminal Investigation
Huawei who are currently looking for a consumer products spin doctor in Australia, is now facing a criminal investigation after being dumped by retailers and carriers over security concerns.
Overnight the US Justice Department confirmed that they are investigating whether Huawei Technologies violated U.S. sanctions related to Iran.
Analysts said a worst-case scenario could entail Huawei suffering the same fate as smaller Chinese rival ZTE which has lost access to U.S.-made components as well as Google Android software in a similar probe.
The Wall Street Journal said that it’s unclear how far the Justice Department probe has advanced and what specific allegation federal agents are probing. A Huawei spokesman declined to comment.
Such a probe raises the stakes for Huawei, which is facing a series of actions by Washington to diminish the company’s already limited business dealings in the U.S. It could also have spill over effects for its much larger business overseas, particularly in Europe and markets such as Australia where the Federal Government is considering a ban on Huewei supplied 5G networking gear.
Investors immediately moved to sell down shares in some of Huawei’s suppliers, including Qualcomm which supplies Huawei with processors for their mobile phones.
The Trump administration also has cited Huawei, the world’s largest maker of cellular-tower electronics and other telecommunications equipment, as a threat to American leadership in the race to develop the future of mobile communication. The company is also the world’s No. 3 maker of smartphones.
The Chinese company came under U.S. pressure in 2012 when a congressional report concluded both Huawei and ZTE could become a tool for state-sponsored spying or sabotage. U.S. officials say Beijing could order the companies to take control of the telecom equipment they make to disable communications, spy or launch other cyberattacks.