Ms Meng Wanzhou, who is also the daughter of the company's founder, is wanted for suspected sanctions breaches linked to Iran. Huawei issued a statement saying Meng was changing flights in Canada when she was detained "on behalf of the United States of America" to face "unspecified charges" in NY.
News of Meng's arrest comes in the wake of reports in April of 2018 that US prosecutors based in NY were investigating the possible violation of USA sanctions against selling USA -origin products to Iran.
But news of Ms Meng's detention spooked sentiment on Thursday. The company is the world's second-largest telecommunications equipment and service provider, after South Korea's Samsung, and recently surpassed Apple.
The arrest is related to violations of USA sanctions, a person familiar with the matter said, though officials have so far stayed mum on her allegations.
The arrest, understood to have happened on December 1, is related to alleged violations of United States sanctions, according to reports. The company has been making a push to become the world leader in 5G technology and met with strong resistance from USA officials.
The U.S. government has been concerned about Huawei for years because of uncertainty over its relationship with the Chinese government.
The arrest by Canadian authorities of Meng stems from an allegation that another company which she managed violated a USA ban against selling technology to Iran. Similar allegations of breaching USA export restrictions led to rival Chinese telecoms equipment maker ZTE Corp being hit with a devastating ban and heavy fines this year.
Huawei later said the HP equipment was ultimately not provided to Iran either by Huawei or Skycom, Reuters said.
The U.S.is anxious about the extent to which Chinese-made equipment is used in the telecommunications sectors of countries that host American military bases.
In 2011, the American government stopped Huawei from purchasing USA server technology company 3Leaf's assets, for national security reasons.
ZTE is China's second-largest telecommunications equipment maker and relies on USA components for its smart phones and networking equipment. "We struggle to see how a comprehensive agreement can emerge in the next 3 months and instead expect trade tensions to resurface in earnest early next year".
Founded in China more than 30 years ago, Huawei's revenue in 2018 exceeded $100billion for the first time in its history, according to CNBC.
The Chinese government has demanded that Meng be released. Security concerns have hampered Huawei's business in the U.S.as acquisitions were rejected and companies warned not to source network equipment from Huawei or ZTE. Huawei has denied the links.
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