ABB Faces U.S. Congressional Scrutiny Over Chinese Ties; Shares Fall
20 January 2024 - 2:23AM
Dow Jones News
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)
Copyright (c) 2024 Dow Jones & Company, Inc.