China arrested five former employees who had discussed the tech giant’s Iranian sales in a chat group, raising questions about its government ties
The five men were all locked in disputes with their onetime employer, the Chinese technology giant Huawei. And they had all joined a group on the social app WeChat to organize.
Then, one of them wrote a message to the group that would upend their lives:
“I can prove that Huawei sold to Iran.”
The message, and the brief discussion that followed, touched on an explosive issue for the company. Huawei had just begun fighting allegations by the U.S. government that it had committed fraud to bypass sanctions against Iran. The company’s chief financial officer, a daughter of its founder, had been arrested less than two weeks earlier as part of the case.
The employees’ messages in the chat group included no hard evidence that Huawei’s activities in Iran were unlawful. Yet within weeks, the Chinese police had arrested all five men, two of them told The New York Times.
The two former employees — Li Hongyuan, 42, and Zeng Meng, 39 — said officers had questioned them about Iran and asked why they had been in contact with foreign news outlets, both topics they had discussed on WeChat.
Mr. Li eventually spent more than eight months in detention. Mr. Zeng spent three.
For over a year now, Huawei, the world’s largest maker of telecommunications equipment and a leading smartphone brand, has been the target of an intense clampdown by the Trump administration. The Justice Department has charged Huawei with stealing trade secrets and lying about its business in Iran. The company denies wrongdoing. American officials say Huawei answers to the Chinese state, which the company also denies.
But even if Huawei is not government controlled, Chinese officials often defend it as if it were a strategically vital state asset.
Beijing has vowed to retaliate for the U.S. government’s restrictions on Huawei. China’s ambassador to Germany threatened consequences if that nation’s government excluded the company from its telecom market. State propaganda outlets cast supporting Huawei as a patriotic act.
And in the case of the jailed employees, Mr. Li and Mr. Zeng said, the police appear to have arrested them in part to stop them from speaking out about Huawei’s activities in Iran.
Huawei declined to comment. It referred to an earlier statement saying that Mr. Li’s case was not a labor dispute, and that the company had reported suspected illegal conduct to the authorities. Huawei also reiterated that it was committed to complying with the law wherever it operates.
The police in the city of Shenzhen, who seized the men, didn’t respond to a faxed request for comment.
News of Mr. Li’s detention set off a wave of anger at Huawei in China last year. Internet users were outraged at what seemed to be a case of a vindictive corporation’s punishing an employee who dared to demand the pay he was owed. Censors quickly erased critical comments and articles. But at the time, the police’s interest in the employees’ discussions about Iran was not reported.
Mr. Li, Mr. Zeng and the three others were first detained in December 2018, not long after the world learned that Washington was accusing Huawei of fraud related to its Iranian business. The five men were embroiled in labor disputes with the company, and they chatted and commiserated in a WeChat group.
The discussion about Iran took place on Dec. 11, according to screenshots seen by The Times. Days later, Mr. Li was arrested in Shenzhen, where Huawei has its headquarters. Mr. Zeng was arrested shortly thereafter in Thailand, where he was vacationing, and taken back to China.
For Huawei, not all sales to Iran would have been illegal. In principle, only those involving U.S.-origin goods, technology or services would have fallen afoul of American sanctions. The company has said its sales in Iran were for commercial civilian use and did not violate sanctions.
Even so, Mr. Li said, the police asked him about his involvement in Iran, which he had mentioned on WeChat. As a former global manager in Huawei’s electrical inverter business, Mr. Li naturally had contact with colleagues in Iran, he told The Times. But he said he had never been there himself.
“I only knew so much. Whatever I knew, I told them all of it,” Mr. Li said. The police did not say why they were questioning him about Iran, he said.
The police also knew that he had been arranging to meet with a reporter for a Hong Kong news outlet that month, Mr. Li said. But he had planned to talk with the reporter about Huawei’s labor and tax practices, not Iran, he said.
“I said, ‘There’s nothing illegal about that,’” Mr. Li recalled.
Mr. Zeng said the police had explained it clearly to him: By discussing Huawei’s Iranian business and communicating with foreign news outlets, the former employees had crossed a line.
China and the United States were in a trade war, Mr. Zeng said one officer had told him. At a delicate time, weren’t they just making trouble?
It was the equivalent, Mr. Zeng said the officer had told him, of supporting Japan after it invaded China in the 1930s.
“At the time, the Meng situation was too hot,” Mr. Li said, referring to the arrest of Huawei’s finance chief, Meng Wanzhou. “They might have been afraid that we were making these noises and would cause problems for Boss Meng.”
The three other employees who were jailed couldn’t be contacted.
Mr. Zeng said he had been working as a product manager for Huawei in Morocco when the company began hinting, in 2017, that it was dissatisfied with his performance. In May the next year, he was let go, but his severance package did not include his year-end bonus, and he sued.
During that time, Mr. Zeng looked for other disgruntled Huawei workers to add to a WeChat group. Word reached Mr. Li, who was suing Huawei for his own bonus after his contract wasn’t renewed. The group eventually swelled to more than 60 people.
They knew they were probably being monitored. Huawei has a habit of infiltrating unhappy employees’ chat groups, Mr. Zeng said.
In November 2018, a WeChat group consisting of Mr. Li, Mr. Zeng and a few others split off from the larger one. They discussed how to draw the international news media’s attention to Huawei’s labor practices.
On Dec. 11, the larger WeChat group was discussing Huawei’s political troubles when someone in the group brought up Iran, screenshots of the messages show.
“I worked on IranCell projects from 2012 to 2014,” the person wrote, referring to an Iranian telecom operator. “I went on business trips.”
“I can also confirm,” Mr. Li replied. “Internally, it’s an open secret that Huawei sells to Iran.”
The police arrested Mr. Li on Dec. 16, according to a document from Shenzhen prosecutors. He was initially accused of leaking trade secrets, he said. Mr. Zeng said he was arrested two weeks later on the same accusation.
The three other employees were also in the smaller WeChat group, Mr. Zeng said. He said one was the person who had first spoken up about Iran in the larger group.
When the police took Mr. Zeng back to his Thai hotel, one officer demanded his phone, he recalled. The officer saw that he had been in contact with international news outlets, including The Times, about his colleagues’ arrests.
The officer uttered an expletive, Mr. Zeng said. Did he really have to go to the foreign media? the officer asked.
Mr. Zeng said his damp cell in Shenzhen had held more than 30 detainees. Only at midday would it get some sunlight, on a patch of wall near the toilet. They would crowd around, basking in the warmth and holding their noses.
After Mr. Zeng had spent a few weeks in detention, the police changed the accusation against him to fraud, he said. He denied wrongdoing, and in March 2019, he was released. But he said the police had first made him write a statement promising that he would not publicly go against Huawei’s company line on Iran or be manipulated by foreign forces with ulterior motives, a reference to the international news media.
The accusation against Mr. Li ended up being extortion. He was freed in August with no charges.
“China is still some distance away from having rule of law,” he said.
Raymond Zhong is a technology reporter. Before joining The Times in 2017, he covered India’s fast-moving economy from New Delhi for The Wall Street Journal. @zhonggg
Categories: Crime & Corruption