HONG KONG (Reuters) – Huawei Technologies, said it was looking to be a compensation for the contract manufacturer, the Flex Bv FLEX.(O) for the illegal withholding of 400 million yuan ($57 million), the value of the property, in the wake of a US ban on the Chinese company.
People walk past a Huawei store in Shenzhen, Guangdong province, China, July 10, 2019 at the latest. REUTERS/Stringer
Huawei spokesman Guo Fulin did not comment on the amount, but a person with direct knowledge of the matter said that the company had sent a lawyer’s letter to the Flex-on Monday, demanding “hundreds of millions of yuan,” compensation for the loss of revenue, wasted resources, equipment replacements, and other expenses.
In its letter, Huawei said Flex is a Chinese unit of measure “ignores Chinese law” by refusing to return to the production equipment, raw materials and half-finished products, which is owned by Huawei, with a value of about 400 million yuan, the Zhuhai production plant “for nearly two months after Washington banned Huawei and in May, the source said.
With its headquarters in the state of California, Flex is one of the world’s largest electronic manufacturers, and then compete against taiwan’s Foxconn Technology (2354.K) the provision of contract services for Huawei products such as smartphones and 5G base stations.
The Smartphone Flex case, the latest fallout from Washington’s trade sanctions against Huawei, which has led to a lot of disruption and confusion in the global tech supply chain.
It is a ban that prohibits U.S. companies, or U.S. companies with more than 25% of Us components in their products, and in order to do business with Huawei. Washington then gave up a three-month delay, until Oct. 19 and claimed to be able to relax the limit, as some suppliers to apply for export licenses.
With a Flex-a spokesman told Reuters on Tuesday that the company was preparing a statement, and could not immediately comment.
The Flex is said to be “active” with a Smartphone “to find a mutually acceptable way forward”, after a partnership which was recently affected by the unexpected challenges that are a result of the U.S.-China trade situation.
Huawei had, in July, with an estimate of the value of the property taken up by the Flex in about 700 million yuan. This, according to a source, 400 million yuan worth of property were held in China and the rest of it out.
It is not clear how many Huawei goods is still with the Flex, but the latest Huawei sources say that the company has acquired most of the property by a third party, to add to the cost.
Flex said on Monday, as the market situation and the needs of the customer” was an influence to some of the jobs are in China, where it employs more than 50,000 people. According to local media reports, the company was able to cut 10.000 jobs in the country and, as a result of the loss of a Smartphone as a client.
Huawei spokesman said mr. Guo declined to say if the Chinese telecommunications giant, however, had to cut ties with a-Flex.
Like the Flex, the AMERICAN courier service FedEx (FDX.S) have been caught up in a row, a result of the ban on Huawei, after it was found to have withheld or diverted, Smartphone packages, which in turn leads to a Chinese government investigation.
FedEx in June, sued the U.S. government over what it said was an “impossible task” of the police and export the content.
Reporting by Sijia Jiang; Editing with the ipad, Himani