2019 Annual Report (^141)
34 Contingent liabilities
(a) On September 2, 2014, T-Mobile USA, Inc. (“T-Mobile”) filed a civil action against the Group’s subsidiary,
Huawei Device USA Inc., in relation to the alleged misappropriation of trade secrets relating to certain of
T-Mobile’s mobile phone test equipment. The two parties reached a settlement on November 8, 2017.
On January 16, 2019, the United States Department of Justice issued an indictment against Huawei Device
USA Inc. and Huawei Device Co., Ltd, containing 10 charges in relation to the alleged theft of trade secrets
relating to the above equipment and alleged wire fraud and obstruction of justice. The charges relate to the
years from 2012 to 2014.
(b) On January 24, 2019, the United States Department of Justice issued an indictment against Huawei
Technologies Co., Ltd., Huawei Device USA Inc. and other parties. The indictment contains 13 charges in
relation to alleged bank and wire fraud, violation of the International Emergency Economic Powers Act of the
United States with respect to certain transactions involving Iran, and associated matters.
On February 13, 2020, the United States Department of Justice issued a superseding indictment which, on top
of the charges filed on January 24, 2019, added the Group’s subsidiaries Huawei Device Co., Ltd and Futurewei
Technologies, Inc. as defendants, and added 3 new charges of alleged racketeering conspiracy, alleged
conspiracy to steal trade secrets and alleged conspiracy to commit wire fraud. The superseding indictment
also includes new allegations including the defendants’ alleged involvement in transactions involving North
Korea and Iran.
The Group has engaged external legal advisers to assist it in respect of the matters referred to in (a) and
(b) above. Given the relatively early stage of these proceedings, as at the date of approval of these financial
statements, management considers that both the timing and the outcome of these matters are inherently
uncertain, and that the amount of any possible obligation of the Group, if any, cannot be reliably estimated.
Accordingly, these indictments give rise to contingent liabilities for the Group and no provision has been made
in this regard in these financial statements. It is also not practicable at this stage for the Group to disclose an
estimate of the possible future financial effect on the Group’s financial statements of these matters.
35 Subsequent events
(a) Financing events
(i) Subsequent to December 31, 2019 and up to the date of approval of the Group’s consolidated financial
statements, the Group has drawn down accumulatively CNY7,000 million from a syndicated loan facility
entered into by Huawei Technologies Co., Ltd., a wholly-owned subsidiary of the Group on March 5, 2020.
(ii) In March 2020, the Company issued two tranches of 5-year medium-term notes with an aggregate principal
amount of CNY4,000 million.
(b) Outbreak of novel coronavirus
The outbreak of a novel coronavirus (COVID-19) since January 2020 has disrupted commercial and economic
activities in China and certain countries around the world. The Group has taken robust measures to ensure the
health of its employees participating in the production and operation, and has resumed operation in a timely and
orderly manner. The COVID-19 epidemic has a negative impact on the Group’s sales in the first quarter of 2020
but will not have a substantial impact on the Group’s ability to continue as a going concern.
36 Comparative figures
The presentation of certain prior year comparative figures has been adjusted to reflect current year presentation
requirements. None of these changes were material.
coco
(coco)
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