Turning up the heat on Huawei

Posted by: Bruce Einhorn on October 15, 2007

Opposition on the anti-Communist right is building to the proposed investment in 3Com by Huawei Techologies, the Chinese network equipment maker run by a former officer in the People’s Liberation Army. Ileana Ros-Lehtinen, the Cuban-born anti-Castro GOP congresswoman from Florida, is leading the charge in the House, introducing a resolution calling on the Bush administration to veto the deal.

Meanwhile, 3Com is trying to reassure people that there’s nothing to worry about. For instance, see this AP story from BusinessWeek. “3Com said in a regulatory filing Thursday that Huawei will not have any access to sensitive U.S. technology or U.S. government sales as a result of the deal,” the AP reports. “3Com said Bain Capital will control 83.5 percent of the company’s voting shares and appoint eight out of 11 board members. Huawei will name the other three. In addition, Huawei can increase its stake in 3Com by up to 5 percent based on certain performance criteria, but it can’t gain any more seats on the board, 3Com said.”

The problem is, critics of this deal aren’t worried about whether Huawei has five seats or just three. They worry about Huawei (a company with ties to the Chinese military) having any seats at all. I doubt that 3Com’s statement is going to do anything to reassure them.

Reader Comments

Steven

October 15, 2007 12:50 PM

3Com's core value is now in China, not US. Huawei valued 3COM US$2.2 billion as a whole. But H3C, 3COM just bought from Huawei recently valued US$1.8 billion.

Alguoshy

October 17, 2007 7:22 AM

Bruce , Also it's known that Halibirton the Strong Oil Compnay has a strong ties with US Army , Does it mean it(halibrton) can't do any buisness Overseas ?

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