Huawei Set Back on Deal in US

The Committee on Foreign Investment in the United States has decided Huawei Technologies should divest itself of a small technology company the Chinese telecom-equipment maker bought in May -- or the committee will make a recommendation to President Barack Obama that the deal be unraveled. Huawei has decided to take its chances with the President, who doesn't have to act on the recommendation, said Bill Plummer, vice president for government affairs for Huawei USA.

The options were laid out after CFIUS concluded its review of Huawei's purchase of U.S. start-up 3Leaf Systems, which created technology allowing groups of computers to work together like a more powerful machine. The Chinese gear maker has said it initially failed to disclose the $2 million deal because it didn't think it was necessary given it only purchased some assets, such as intellectual property, and hired some employees. When Pentagon officials found out about the deal, they took the unusual step of asking the company to file retroactively for a review with CFIUS, an interagency committee that examines acquisitions by foreign companies that may pose a national security risk.