Huawei Technologies on Saturday said it had decided to fire Wang Weijing after the company's sales director was arrested by Poland's counter-intelligence service on suspicion of spying.
The tech giant also said the Chinese national's arrest was not related to Huawei.
"In accordance with the terms and conditions of Huawei's labour contract, we have made this decision because the incident in question has brought Huawei into disrepute," the company said in a statement.
"Huawei complies with all applicable laws and regulations in the countries where it operates, and we require every employee to abide by the laws and regulations in the countries where they are based."
Wang was arrested along with a Polish former senior intelligence agent in Warsaw, according to Polish media reports on Friday.
He is the second Huawei executive to be detained after the company's chief financial officer, Sabrina Meng Wanzhou, was taken into custody in Canada last month at the request of a US prosecutor. Meng was later released on bail.
It comes as Huawei, the world's largest telecoms equipment supplier, is facing pushback amid growing suspicion over its ties to the Chinese government and military - links the company has repeatedly denied.
Washington has l ong seen Huawei as a national security threat that could be used by Beijing for spying and last year passed a law banning the US government and contractors from using its technology.
Australia and New Zealand - both members of the so-called Five Eyes intelligence alliance, along with the US, Canada and Britain - have also blocked Huawei from building their next-generation 5G wireless networks.
But similar bans in Europe, its biggest foreign market, could pose a more significant financial challenge to the company.
Huawei first made inroads into the region in 2000, opening its first European R&D centre in Stockholm. Since then, its has expanded exponentially in both telecoms equipment and smartphone sales. Huawei earned 163.8 million yuan (US$24.2 million) from Europe, the Middle East and Africa in 2017, according to its annual report. That accounted for 27.1 per cent of its total revenue and more than revenues from the Americas and Asia-Pacific combined.
In Poland, the company's headquarters for central and northern Europe and the Nordic region, Huawei overtook Samsung last May to become the top smartphone vendor in the country, according to market research firm GfK.
But just as the US and some of its allies have done, some European governments and telecoms firms are starting to reassess their risk exposure to Huawei.
In early December, the head of the British spy agency warned of the security risk Huawei could pose to Britain's critical telecoms infrastructure. MI6 boss Alex Younger said Britain needed to decide how comfortable it was "with Chinese ownership of these technologies".
Following the warning, BT - Britain's largest mobile provider which gave Huawei its first big contract in western Europe in 2005 - said it was removing the company's equipment from key parts of its 3G and 4G networks as part of an internal policy not to use it for core infrastructure, which will also apply to 5G networks.
A week later in France, Orange said it would not use Huawei to build its 5G networks. And the next day in Germany, Europe's biggest market, Deutsche Telekom announced it would review its vendor strategy and raised the prospect of dropping Huawei.
Norway an d Sweden have both said they would begin investigating whether Huawei should be used to help build 5G infrastructure.
Meanwhile, the Czech Republic's National Cyber and Information Security Agency warned in December that Huawei's hardware and software posed a security threat. Prime Minister Andrej Babiš ordered his government office to stop using Huawei mobile phones the next day.
But on Friday, Czech President Miloš Zeman, who has in recent years promoted close ties with Beijing, accused the agency of offering no proof for the alleged Huawei threat and warned of China's retaliation in an interview with TV Barrandov.
"According to information that some ministers possess … China is preparing retaliatory measures in the wake of this campaign against the company Huawei," he was quoted as saying, pointing to carmaker Skoda Auto, which has made investment deals in China, and PPF investment group, whose telecoms operator O2 plans to roll out a 5G network with Huawei in the Czech Republic.
Additional reporting by Josephine Ma
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