Huawei denies 'ludicrous' espionage claims

Chinese networking vendor Huawei has slammed as "ludicrous and inaccurate" claims that it had links to the Chinese military and government that could cause security problems for the National Broadband Network.

The Australian newspaper today reported that security agencies would "closely examine" any Huawei involvement in Optus' bid to build the National Broadband Network due to international concerns about the company's links with Chinese authorities.

But in a statement released this afternoon under the name of its vice director of public relations for the Asia-Pacific region, Thong Poh Wah, Huawei, which supplies equipment to a number of Australian telcos and other companies, denied the claims. The company employs 230 staff in Australia.

"Huawei is privately held and 100 per cent owned by its employees, administered through an employee share ownership plan," the company said. "No other organisations, including the government, army or business hold stakes in Huawei."

Referring to The Australian's report that Huawei founder Ren Zhengfei had a military background, Huawei pointed out prior military service was common amongst many North American and European business leaders.

"Huawei only manufactures telecom equipment for commercial public use and its main customers include 35 of the world's top 50 telecom operators," the company said, noting sales related to the Chinese government accounted for only 0.5 per cent of its income in the 2007 year.

"Before Huawei can work with those companies, it must meet a strict auditing process that reviews the company's strategic planning, process, management system, quality control and human resource," the statement said.

Shadow Communications Minister Nick Minchin today claimed The Australian's report contained "potentially very concerning revelations". Australians needed to be assured the NBN was free of any potential for cyber-espionage, he said.