Who is Meng Wanzhou and why did her arrest roil global markets?

On Thursday, December 6, the Sensex slipped 572 points or 1.6 per cent -- the biggest single-day fall in two months. Sensex wasn't the only index to tumble. In the US, the Dow Jones and S&P 500 tumbled nearly 1.7 per cent each; in Europe the benchmark FTSE 100 crashed 3.2 per cent (European shares touched two-year lows, according to BBC); and in Asia Hang Shen (-2.5 per cent), Nikkei 225 (-1.2 per cent), Shanghai (-1.7 per cent) and Kospi (-1.6 per cent) all felt the tremors and reacted.

At the heart of this global meltdown was the arrest of one Meng Wanzhou. Name sounds familiar? Nope?

Well Meng Wanzhou, aka Sabrina Meng aka Cathy Meng, is the 46-year-old heiress to the telecom giant Huawei. Currently, she is the deputy chairwoman and chief financial officer of the company.

According to the Huawei website, she "holds a master's degree from Huazhong University of Science and Technology. Ms Meng joined Huawei in 1993." More importantly, she is the daughter of Ren Zhengfei, the founder of Huawei.

Huawei, by the way, is the second-biggest smartphone maker in the world after Samsung; it is also a global giant when it comes to making telecom equipment.

The person

Not much is known of Meng's private life except that she is married and has two children. In a 2013 interview, she dismissed rumours of her husband being a Huawei honcho saying he did not work in the sector.

According to Dreshare.com (and this has not been independently verified by IndiaToday.in), Meng is worth $100 million, loves fried chicken and hamburgers, and does not wear any tattoos.

That's her background. Now, for Meng and the market meltdown.

What happened?

On December 1, she was arrested in Vancouver, Canada while changing planes. The news of her arrest was only made public on Wednesday (December 5), sending seismic shocks across the markets.

According to the Canadian Justice Department, Meng was arrested on the request of the US, which wants her extradited. Earlier in April year, the Wall Street Journal had reported that the US justice department was investigating charges that Huawei may have violated sanctions against Iran imposed by the US.

The fact that one of China's tech princesses may face criminal charges in a New York court has provoked the Chinese dragon to spout fire. The arrest has "seriously harmed human rights", fumed the Chinese embassy in Ottawa. State-run Global Times thundered that the US "is resorting to a despicable rogue's approach".

But can the arrest of a top executive of a global firm be enough to get shares sliding?

Back story

Meng's is no ordinary arrest. Huawei is really big in China and the arrest of its heiress-apparent is a slap on China's cheek. It is also an affront to the world's second-largest economy's growing hegemony on the global stage.

There are fears that the Canadian-US move might jeopardise the trade truce agreed upon by Donald Trump and Xi Jinping. A trade war between the world's two biggest economies will have serious consequences across countries.

Speaking to the Canadian newspaper, The Globe and Mail, former Canadian ambassador to China, David Mulroney, said: "The arrest also threatens to fatally undermine Huawei's efforts to portray itself as a reliable infrastructure partner to its remaining supporters in the West."

And that's where the nub of the problem lies.

There are a number of countries wary of inviting Huawei to partner in infrastructure development, especially when it comes to building a 5G network. The US, Canada, UK, Japan, Australia and New Zealand have stopped using Huawei equipment. Even India raised red flags but media reports suggest that the Chinese company has been invited to take part in building a 5G network in the country.

Huawei has been under a cloud for some time with many countries saying that the Chinese government uses its equipment to spy on people and extract data.

US senators cutting across party lines have accused Huawei of being a security risk. This has been echoed across power corridors of a number of countries.

What happens next?

Meng's bail hearing is scheduled for Friday (December 7). Given the US and Canada's historically close ties, Meng is likely to be put on a plane to New York. But then Donald Trump hasn't had the best of relationships with most global leaders, other than Russia's Vladimir Putin. Justin Trudeau, the Canadian premier, is not known to be a Trump cheerleader. Will he thumb his nose at Trump?

Markets have steadied on Friday after Thursday's bloodbath. But punters will not forget Meng Wanzhou any time soon.