ABB Faces U.S. Congressional Scrutiny Over Chinese Ties; Shares Fall
By Pierre Bertrand
ABB shares fell after the company confirmed it is facing U.S. congressional scrutiny regarding its ties with Chinese state-owned company Shanghai Zhenhua Heavy Industries and has been invited to provide testimony to lawmakers.
Two congressional committees wrote to the Switzerland-based technology company to have it explain its operations with Chinese state-owned companies while also working with U.S. government agencies, citing concerns about intelligence, cybersecurity and supply-chain risks. ABB's software and technology on ZPMC shipping cranes in seaports in the U.S. is pointed out in particular.
ABB said in a statement Friday that it was reviewing the content of the letter and that it took the committees' request seriously.
ABB shares at 1414 GMT fell 3.5% to CHF35.33.
Shanghai Zhenhua Heavy Industries, also known as ZPMC, wasn't immediately available for comment outside of business hours in China.
The Wall Street Journal in March reported that some national-security and Pentagon officials considered ZPMC's ship-to-shore cranes as a so-called Trojan horse amidst concern their sensors could gather intelligence through the registering and tracking of shipping containers. At the time, representatives of ZPMC didn't respond to requests for comment.
"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," said the letter sent this week to ABB by the Committee on Homeland Security and the Select Committee on the Chinese Communist Party.
ABB said it supplies software and hardware for cranes used in ports around the world, including the U.S., and that its crane-software technology is supplier-independent and installed on cranes made by major crane builders including Chinese companies.
"These cranes are bought by U.S. ports from Chinese and other companies, not from ABB," the company said.
ZPMC accounts for nearly 80% of the ship-to-shore cranes at U.S. maritime ports, the Select Committee on the Chinese Communist Party said on its website.
The back and forth between ABB and the U.S. lawmakers dates back to July 2023. The committees' letter states ABB in August provided more than 650 documents about its work in China but that the company had yet to answer several important questions.
The lawmakers said it was 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."
Write to Pierre Bertrand at pierre.bertrand@wsj.com
(END) Dow Jones Newswires
January 19, 2024 10:08 ET (15:08 GMT)
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