Huawei founder, executives to pay $469,000 fine over quality breaches

HUAWEI Technologies Co-founder Ren Zhengfei and top executives will pay a self-imposed fine totalling 469,000 dollars for management oversight of some quality breaches at the firm, an internal company memo shows on Friday.

According to a notice sent to Huawei member of staff, Ren said there had been cases of “quality breach and business falsification” at some business units in recent years.

He said that the board had decided to hold key leaders responsible.

Ren, who did not provide any details about the breach, was fined 1 million yuan.

The Huawei’s three rotating CEOs Guo Ping, Eric Xu, Ken Hu and human resources president Jason Li were fined 500,000 yuan each, according to the memo.

Founded in 1987 by Ren, an ex-People’s Liberation Army officer, Huawei is collectively owned by its employees and known for a culture of strong discipline including self-criticism.

The Shenzhen-headquartered company has some 180,000 staff and has grown rapidly in recent years to become China’s biggest maker of telecom equipment and smartphones.

“Ren did not issue this penalty in response to any specific event, but to encourage the management team to reflect on past management and decision-making gaps.

“The fine in question relates to incidents uncovered during an internal audit,” Huawei told Reuters.

According to a person briefed on the matter, Huawei’s northern and eastern European regional business, including its Poland office, was found to have inflated sales data.