ZURICH (Reuters) – Swiss engineering group ABB’s operations in China are being scrutinised by two U.S. Congress committees dedicated to investigating security threats and risks posed by Beijing, documents showed on Friday.
The committees from the House of Representatives sent a letter this week to ABB inviting executives to public hearings to clarify the company’s relationship with a Chinese state-owned company that they said raised “significant concerns”.
ABB shares fell 2.5% on Friday morning after Sweden’s Sverige Radio first reported on the approach by Committee of Homeland Security and the Select Committee on the Strategic Competition between the U.S. and the Chinese Communist Party.
ABB, which makes electric chargers, industrial robots and factory motors and drives, said it was reviewing the letter and took the matter seriously.
The letter sent to ABB Chief Executive Bjorn Rosengren raised concerns about the installation of ABB equipment by Shanghai Shenhua Heavy Industries (ZPMC), a state-owned Chinese company, onto U.S.-bound ship-to-shore cranes.
The committees wanted to probe potential “cybersecurity risks, foreign intelligence threats, and supply chain vulnerabilities at seaports in the United States,” read the letter, which was posted by news website Politico.
The Chinese government and ZPMC did not immediately comment.
The committees’ letter asked ABB for information about its commercial relationship with ZPMC, as well its work with U.S. defence, intelligence and national security agencies, saying they wanted to examine whether there was a conflict of interest.
“It is vital … that ABB explains its relationships with PRC (People’s Republic of China) state-owned enterprises, and whether ABB should be trusted to continue working on behalf of U.S. government agencies while simultaneously engaging with entities owned, controlled, subsidized, or influenced by the PRC,” the committees said.
“Allowing ZPMC to install ABB equipment and technology in China onto cranes bound for the United States is unacceptable and must be remedied without any further delay.”
Although ABB had provided documents to answer requests last year, many important questions remained unanswered, the letter said.
ABB conformed it had received the letter and said it would provide a response “as appropriate”.
“ABB is a supplier of electrical and automation technologies and we take this matter seriously,” the company said in a statement.
The company lists China as its second largest market after the United States.
(Reporting by John Revill; Editing by Andrew Heavens)
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