The firm was established in 1988 and, until very recently, the telecommunications sector was declared off-limits to private-sector firms in China. In addition, Chinese financial regulations have stringent restrictions about issuing shares to employees. It is all but certain that Huawei, by virtue of the fact that it is a private-sector firm, is in technical violation of many of these regulations. This hypothesis also dovetails with the widely held knowledge that Huawei has backing from the Chinese military.
