Algeria Sentences Huawei and ZTE Executives To 10 Years In Jail

By Tech Wire Asia | 18 June, 2012

Leading Chinese telecoms manufacturers Huawei and ZTE are in hot water again after the government of Algeria charged and sentenced their executives to 10 years in jail and fined 3M Dinars (S$48,887) each, on top of a 2-year ban on bid tendering. Algeria issued arrest warrants for the executives — who are currently in China, for the crimes of corruption and influence peddling.

Algeria issued arrest warrants against Huawei and ZTE executives for corruption and influence peddling. (Image: Huawei and ZTE)

Executives Dong Tao, Chen Zhibo (both ZTE) and Xiao Chunfa (Huawei) were all tried and sentenced in absentia, with the international arrest warrants served to their respective companies. Representatives from ZTE say they’re looking into the matter, while Huawei issued a statement saying: “We take this matter very seriously and we are currently reviewing the court’s decision.”

The three executives reportedly colluded with former Algérie Télécom executive Mohamed Boukhari, and Algerian businessman Chami Madjdoub in getting lucrative deals. Boukhari and Madjdoub were sentenced to 18 years’ jail time and fined 5M Dinars (S$81,810) for receiving suspicious payments and for money laundering from 2003 to 2006. The ZTE and Huawei executives reportedly coursed money to Boukhari by sending $10M (S$12.7M) through Madjdoub’s offshore accounts.

The two companies are currently being scrutinised by US lawmakers for their close ties to the Chinese government. Insinuations of espionage are flying around Washington when ZTE and Huawei are discussed. As Representative Dutch Ruppersberger said: “We’re very concerned about the Chinese government hacking our national networks.” Some sectors are looking into Huawei’s link to the People’s Liberation Army and the Communist Party of China (courtesy of its founder Ren Zhengfei, a former major in the PLA and Communist Party member).

Aside from the European Union (EU) uncovering “significant Chinese government support, including ‘massive’ credit lines from state-owned banks,” the two telcoms providers have also been accused of selling technology to help the Iranian regime. Huawei is still zinging from being banned from Australia’s national broadband network project for fear of cyber attacks.

Both ZTE and Huawei have gained solid foothold in the US and worldwide as providers of “rebrandable” mobile devices and branded telecommunications equipment. But it seems they carry a lot of baggage: Corruption, unfair trade practices, espionage, cyber attacks, ties to a communist state, ties to an extremist Islamic state… If these two companies were a country, the US would have invaded them already.