So Far, Huawei Says 'No' to Suggestions It Divest 3Leaf

By Ed Silverstein February 15, 2011

Despite pressure brought on by a U.S. government regulatory panel, the Pentagon and powerful Senators, Huawei is rejecting American suggestions that it divest a U.S.-based technology company.

The U.S. Committee on Foreign Investment in the United States (CFIUS) recommended that Huawei divest 3Leaf, Huawei said, according to Reuters. It was a suggestion that the company could respond to voluntarily, rather than any kind of direct order.

Huawei purchased 3Leaf for $2 million in May 2010.

The U.S. government is concerned about Huawei holding 3Leaf because of Huawei’s relationship with the Chinese government. Huawei is awaiting a review of the situation by the White House, which should be released within two weeks.

The deal allowed Huawei to purchase key parts of 3Leaf – even though the Chinese firm allegedly has dealt with known terrorists, according to a report from TechZone360.

A letter from U.S. Senators Jim Webb (D-Va.) and Jon Kyl (R, Ariz.) said that the sale of 3Leaf to a Chinese firm posed a “serious risk” for national and economic security, TechZone360 said.

They explained in the letter, which was sent to Obama Administration officials, that the Chinese firm has a “history of illegal behavior and ties with the People's Liberation Army, Taliban and Iranian Revolutionary Guard.”

Several lawsuits have been filed in U.S. courts against Huawei that allege it has taken part illegal activities “from patent and trademark infringement to fraudulent inducement,” claimed the Senators, TechZone360 said.

The Senators further suspect that Huawei’s acquisition of just parts of 3Leaf was designed to avoid increased scrutiny by U.S. regulators, according to the letter.

The CFIUS has the power to “undo” Huawei’s acquisition, TechZone360 said.

William Plummer, vice president of government affairs for Huawei, told the Wall Street Journal that, "As Huawei has stated in the past, the company is 100 percent employee-owned and has no ties with any government, nor with the PLA," TechZone360 said.

In other company news, the company reported in a press release that it introduced its latest Android Gingerbread smartphone, the Huawei IDEOS X3, at the Mobile World Congress in Barcelona, Spain, on Feb. 15.

The IDEOS X3 blends hardware with high-performing software to help users manage their communication and social networking, the company said.

At the same event, Huawei also launched the Huawei HiLink, a plug-and-link data card which connects users to high-speed Internet on-the-go, the Huawei Mobile WiFi Smart Pro wireless modem, which automatically selects the most appropriate high-speed Internet connection available, as well as the Huawei IDEOS S7 Slim, a next-generation 7-inch capacitive touch screen tablet.


Ed Silverstein is a TechZone360 contributor. To read more of his articles, please visit his columnist page.

Edited by Tammy Wolf

TechZone360 Contributor

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