Flextronics seizes Huawei assets worth over $ 100 million
In May of this year, the United States included Huawei in the "black list" of companies to which American (and affiliated with them) manufacturers can not supply goods and services. And although many companies have not refused (or subsequently resumed) cooperation with Huawei, this is not true of Flextronics International (Flex).
Singapore's Flextronics is the second largest (after Foxconn) electronics manufacturer and one of the most important partners of Huawei. Annually, Flex received orders from Huawei in the amount of $ 2.5 billion. However, with the introduction of the US ban, Singaporeans immediately stopped cooperation with Huawei. They stopped supplying their products and refused to return Huawei-owned materials and equipment totaling more than $ 100 million, of which $ 58 million came from the Flex factory in China and $ 43 million from factories in other countries of the world.
The unfriendly actions of a recent partner led to additional costs for Huawei. Until the middle of June of this year, Flextronics held Chinese-owned assets, but at the moment things have gotten off the ground. Through an intermediary, Huawei was able to negotiate the return of its property, located in the Chinese factory Flex. Huawei took over the costs. After that, naturally, Huawei ceased all business operations with Flextronics.
Experts note that the Chinese giant has a chance to play the situation in their favor. The fact is that the contract between Huawei and Flex's subsidiary located in China is made in accordance with the requirements of local jurisdiction, therefore, US domestic administrative laws and regulations do not apply to it. By grabbing Huawei’s property, Flextronics violated Chinese law and failed to fulfill its contractual obligations. Because of these actions, Flextronics is likely to be included by the Chinese Ministry of Commerce on the list of unreliable legal entities.
Meanwhile, the Flex factory in China has discontinued production. The reason for the shutdown was that Huawei has excluded Flextronics from its supplier chain.
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