HONG KONG (Reuters) – Huawei Technologies HWT.UL, the world’s third-largest smartphone maker, said on Wednesday that Chinese police are conducting an investigation, after the China sales head of its smartphone unit was detained on suspicion of accepting bribes.
Huawei, which in recent years has overtaken Apple Inc (AAPL.O) and others to take the top share of China’s smartphone market but is now under pressure from fast-growing domestic rivals, declined to disclose details of the case.
“The authorities are investigating the matter, and we defer to their discretion as to what can be disclosed,” the company said in e-mailed comments to Reuters when asked about the case.
“We take our business ethics extremely seriously, and have zero tolerance for corrupt behavior.” It gave no further comment.
In an internal memo to staff, however, Huawei said Teng Hongfei, the Greater China sales head for its consumer business division, had been detained for “the suspected crime of accepting bribes as a non-state functionary”.
Reuters was unable to immediately reach Teng or a representative for comment.
But its top spot in the world’s biggest smartphone market has come under threat over the past year from competitors such as OPPO and Vivo, and its profits have suffered as a result.
Huawei has a 22.3 percent share of China’s smartphone market, followed by OPPO at 21.6 percent, according to third-quarter data from industry tracker IDC.
Founded by Ren Zhengfei, a former People’s Liberation Army officer, Huawei has more than 180,000 employees and has taken a number of high-profile actions in recent years to counter corruption.
In January, Ren held a vow-taking ceremony with senior managers who swore not to engage in corruption, and in 2014 an internal inspection found 116 employees in violation of its anti-corruption policies.
Reporting by Sijia Jiang; Editing by Adam Jourdan and Edmund Klamann