Plans by Huawei Technologies, the mainland's largest wireless equipment provider, to become the second-largest shareholder in 3Com Corp may face a national security investigation by the United States government.
3Com, a Nasdaq-listed network equipment maker that posted an US$18.7 million loss in the three months to August, revealed last Friday that it had agreed to a takeover proposal by private investment firm Bain Capital and Huawei for US$2.2 billion.
Huawei would take a 16.5 per cent stake.
The US would probably probe the deal on national security grounds, the Financial Times said on Saturday, citing former Justice Department official Christopher Simkins.
The US Committee on Foreign Investment looked closely at any mainland transactions involving government information technology, the newspaper said.
Huawei's ownership of 3Com would be 'really worrisome', the Financial Times quoted Pentagon internet security expert Sami Saydjari as saying.