In early September the Financial Times posted a report titled "Huawei dismisses corruption probe as 'routine investigation' wherein Huawei's CEO confirmed that there was an internal probe into bribery at the company, but dismissed it as a "routine investigation" into possible violations of the company's code of conduct. Almost four months later and the news is far more serious. Huawei's head of sales for its domestic consumer business has been arrested.
In a Huawei statement issued today, they noted that police have taken immediate action on Teng Hongfei on 'suspicion of taking bribes.' Teng ran Chinese consumer sales for the company, which over the past year rose to number one in smartphones at home and number three globally to become a major rival to Apple Inc. and Samsung Electronics Co, reports Bloomberg.
"The arrest is a blow to one of China's biggest closely-held technology companies, the largest of a coterie of Chinese smartphone makers that have grabbed global market share via affordable phones with premium specifications.
The company made no mention of a replacement for Teng, who heads domestic sales for one of Huawei's fastest-growing arms. The consumer division, comprising mainly smartphones, reported a 36 percent rise in revenue to 105.4 billion yuan ($16 billion) during the first six months."
Patently Apple covered the launch of Huawei's Mate 10 smartphone with the world's first AI chip built in back in October. The rise of Huawei in the smartphone market will now be marred by such bribery charges. The extent of the charges, however, have yet to be revealed.
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