Huawei seeks to raise fresh funds from employees amid US trade sanctions

The world’s largest telecommunications equipment vendor adopted a new rule on profit dividends that allows its employees to buy virtual shares worth 25 per cent of their income from the past five years

Each virtual share was valued at 7.85 yuan in 2019, representing a 45 per cent increase from 5.42 yuan in 2010

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Published: 6:30pm, 7 Sep 2020Updated: 9:49pm, 7 Sep 2020

Huawei Technologies is trying to raise funds from its employees, as China’s largest tech company struggles with the impact of US trade sanctions, according to three people familiar with the matter.

Earlier this year, the world’s largest telecommunications equipment vendor adopted a new rule on profit dividends that allows its employees to buy virtual shares worth 25 per cent of their income from the past five years, the people said. Employees who have worked for more than five years are eligible for the new scheme, according to the people, who asked to remain anonymous because the information is not public.

The Shenzhen-based company is 100-per cent owned by 104,572 employees, including founder and chief executive Ren Zhengfei. It had 194,000 total employees worldwide at the end of last year.

A Huawei spokeswoman declined to comment on Monday.

The new internal funding programme comes at a time when Huawei faces increased US trade sanctions and as the Trump administration continues its campaign to get the company blocked from 5G mobile network projects around the world.

By relaxing its policy on buying virtual shares, Huawei has found a means to raise fresh funding for its research and development initiatives, according to two of the people familiar. The scheme also helps the company retain talent amid its current difficulties, they said.

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