Another corruption scandal hits Huawei with its top executive suspected of bribery

The executive vice president of Huawei’s consumer business group Greater China, Teng Hongfei, has been taken away by the public security, according to people familiar with the matter. Once a recipient of the highest management honor granted by Huawei, Teng is under investigation for corruption charges, Caijing has reported (in Chinese).

The consumer division is the fastest growing among Huawei’s three business groups, thanks to strong performance of Huawei’s smartphone sales in recent years. Teng’s fall from grace might have been a result of the rampant corruption inside China’s direct-to-consumer sales, in which retailers often bribe the manufacturers.

This isn’t the first time Huawei has found itself in the midst of a corruption scandal. This year started with a bang when six top middle and senior leaders from the consumer business group were accused of giving out internal information to LeEco (formerly known as Leshi) and Chinese smartphone brand Coolpad (酷派) in January. One of the arrested employees was the chief architect of Huawei’s flagship P6 Wu Bin.

The most famous corruption case in recent years was in 2014 when the company accused 116 members of staff of corruption and managed to retrieve RMB 370 million of funds. According to local media speculation, the number of people involved in the practice might have been higher.

In 2012, Huawei also found itself in trouble in international waters when Huawei’s Xiao Chunfa was sentenced by an Algerian court along with two other staffers from Chinese smartphone maker ZTE. The trio was tried in absentia for a bribery scandal involving the state-owned Algérie Télécom. They were sentenced to ten years in prison and fined five million dinars ($65,000).

Huawei has made efforts to eliminate internal corruption in its ranks by rewarding law-abiding employees and making its executives take a loyalty oath.