A federal advisory committee led by the Treasury Department has put the brakes on plans by Bain Capital of Boston and the Chinese company Huawei Technologies to purchase the U.S. manufacturer of Internet routing equipment 3Com, as Steven Weisman reports in the New York Times.  The Committee on Foreign Investment in the United States, or CFIUS, is responsible for reviewing foreign investment projects that would enable foreign entities to own more than 10 percent of a U.S. company.

Huawei Technologies would have owned 16% of 3Com in the present deal.  The Times story did not clarify the mechanism by which CFIUS stops such deals, but pointed to "antihacking computer software for the military" produced by 3Com as a source of concern, with the apparent assumption being that with part-Chinese ownership, the company could produce faulty software for the U.S. military.  Read Weisman here.

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