China-based telecom equipment maker Huawei Technologies could be forced by the US President to unwind its $2m purchase of 3Leaf after a negative ruling by the country’s committee looking at sensitive deals.
Barack Obama will have to decide after Huawei declined to sell on 3Leaf assets as part of a recommendation by the Committee on Foreign Investment in the United States.
3Leaf had raised $55m, including $35m in its September 2008 series C round from Intel Capital, LSI Corporation and venture capital firms Alloy Ventures, Enterprise Partners Venture Capital and Storm Ventures.
News provider Financial Times said legal experts thought the move by Huawei was virtually unprecedented.
Huawei said it believed that Cfius had been "bothered and challenged by" the fact that the company failed to alert the panel to the deal before it was already closed.
Huawei had been forced to abandon a deal to buy 3Com in 2008 because of US security concerns over its alleged links to the Chinese army.