Huawei’s China smartphone sales chief detained on corruption charges

Teng Hongfei, sales chief of Huawei’s consumer business group in China, taken into custody by public security agents

PUBLISHED : Wednesday, 27 December, 2017, 1:01pm
UPDATED : Wednesday, 27 December, 2017, 2:20pm

A senior Huawei Technologies sales executive has been arrested over suspected “non-state staff bribery”, the Shenzhen-based company said in a statement on Wednesday.

Teng Hongfei, the sales chief of Huawei’s consumer business in China, was taken into custody by public security agents, the statement said, adding that further information would only be disclosed by the police.

“Huawei has consistently pushed for ethical business practices and has zero tolerance for internal corruption,” the company said in a statement.

Huawei’s consumer business, which posted a 44 per cent year on year increase in revenue to 179.8 billion yuan (US$27.5 billion) last year, includes sales of smartphones, tablets and laptops, as well as home-based consumer electronics products like routers.

Earlier this year, Teng received the “Whizz Kids” award which recognises 10 promising and successful internal managers within Huawei, considered the highest honour among the company’s management.

Teng’s LinkedIn page information said he joined Huawei as executive vice-president of the company’s consumer business group in Greater China in June 2014, with 10 years prior working experience at rival Nokia and two years at Samsung Electronics before that.

The consumer business is one of the fastest growing segments among Huawei’s three business groups, which also include carrier networks and enterprise.

In the third quarter of this year, Huawei retained its leadership in smartphone sales in China by shipping 22.3 million units for a market share of 19.4 per cent, according to data released in November by industry research firm IDC.

Globally, Huawei is the third-largest smartphone vendor behind Samsung and Apple. The privately held company has been ditching cheaper products to focus on smartphones priced above US$500.

Huawei announced earlier this month that it will target the US market next year, with plans to sell its flagship Mate 10 models there.

In another Huawei legal case in January this year, six former company employees were arrested for leaking commercial secrets to their new employers, Coolpad and LeEco, rivals to Huawei in the smartphone market.

The company has taken various measures over the years to address such incidents, including having employees take oaths to indicate their integrity and loyalty to the company.

In 2014, Huawei accused 116 staff members of corruption and managed to retrieve 370 million yuan of misappropriated funds. Chinese media later reported that the company distributed the 370 million yuan among its other employees as a bonus for abiding by the law.