Huawei says it wants to ease US security fears

Updated: 2011-02-25 08:03
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BEIJING - Chinese telecom equipment maker Huawei issued a public invitation Friday to U.S. authorities to investigate the company to dispel what it says are mistaken fears that it is a threat to American national security.

Huawei Technologies Ltd. made the unusual appeal in a letter on its website following its announcement last week it would unwind its purchase of American computer company 3Leaf Systems after it failed to win approval from a U.S. security panel.

"We sincerely hope that the United States government will carry out a formal investigation on any concerns it may have about Huawei," says the letter, signed by Huawei deputy chairman Ken Hu.

The company rejected what it said were untrue allegations that it has ties to China's military, receives improper Chinese government financial support or is a threat to American national security.

"There is no evidence that Huawei has violated any security rules," said the letter.

Huawei is one of the biggest makers of network switching gear and reported sales of $28 billion last year. It has struggled to gain a foothold in the United States against rivals such as Cisco Systems Inc.

Huawei was founded by a former Chinese military officer, Ren Zhengfei, which has fueled speculation about its links to the People's Liberation Army. The company says it is owned by its employees and has no military connection.

Friday's letter said Ren served as a Chinese military engineer before leaving the service in 1983. It said he worked for an oil company before founding Huawei in 1987 with 21,000 yuan (about US$2,500 at that time).

"It is a matter of fact that Mr. Ren is just one of the many CEOs around the world who have served in the military," the letter said. "It is also factual to say that no one has ever offered any evidence that Huawei has been involved in any military technologies at any time."

In 2008, Huawei and an American partner, Bain Capital, withdrew a request for U.S. government approval of a bid to buy 3Com. The companies said they failed to satisfy national security concerns.

Huawei says it failed to apply for approval of the $2 million 3Leaf deal in advance because it bought the company's technology and hired some employees, rather than acquiring the whole company. The Pentagon took the unusual step of demanding that Huawei retroactively apply for a CFIUS review.

At a congressional hearing in Washington last week, National Intelligence Director James Clapper said the case highlighted the importance of ensuring that U.S. industry was aware of potential security threats "when we depend on foreign concerns for key components in any of our telecommunications network."

Huawei Technologies Ltd.: