February 21, 2019 / 4:52 PM / 25 days ago

UPDATE 2-Huawei committed to Canadian investment despite CFO arrest -chairman

* Chairman hopes 5G decision based on merits of technology

* Chairman says China-Canada relationship "not ideal"

* Company plans to add 200 R&D jobs in Canada (Adds further comment from chairman)

By Matt Scuffham

TORONTO, Feb 21 (Reuters) - Huawei Chairman Liang Hua said on Thursday the company is committed to increasing investment in Canada despite the arrest of its chief financial officer by Canadian police at the request of the United States last December.

Liang spoke to reporters after the Chinese telecommunications company said it would increase Canadian research and development investment by 15 percent this year and add 200 R&D jobs, expanding its workforce by 20 percent.

"We won't change our approach on R&D investments and we'll continue to step up our investment in R&D in Canada," Liang said. "We would like to work further with the telecom operators."

Meng Wanzhou, the company's CFO and also the daughter of its founder, Ren Zhengfei, has been charged with bank and wire fraud in violation of American sanctions against Iran.

Liang said he believed the arrest of a senior executive on such charges was "not common and rare," adding that he could not say the charges were not politically driven. Meng is fighting a U.S. extradition request.

"I hope that she can be freed and that she can reunite with her family, but I'm not a lawyer so I cannot comment on the substance of the case," he said.

After Meng was detained, China arrested two Canadians on national security grounds, and a Chinese court later sentenced to death a Canadian man who previously had only been jailed for drug smuggling.

Liang said that the current relationship between China and Canada is "not ideal."

"We are aware that there are some problems which need to be solved between the two countries," he said.

Canada is considering whether to allow Huawei to supply equipment to 5G networks, the latest generation of cellular mobile communications. Some Canadian allies have imposed restrictions, citing the risk of espionage.

Liang said that he hoped any decision would be based on the merits of the company's technology rather than other factors.

Reporting by Matt Scuffham Editing by Chizu Nomiyama and Steve Orlofsky

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