Boeing Co. said Thursday it was canceling a controversial satellite order that was financed by a Chinese government-owned firm, citing default for nonpayment.
Boeing’s decision follows a Wall Street Journal investigation this week that highlighted China’s opaque role in funneling around $200 million to the project.
Under U.S. export-control laws, Boeing isn’t allowed to sell satellites to China directly. The company faced criticism from national security officials that it attempted to sidestep U.S. regulations on sensitive technology, which the U.S. military relies on.
A person familiar with Boeing’s thinking said canceling the order was a business decision. The person said the company would likely attempt to resell the satellite, which had been nearing completion at a Boeing facility in Los Angeles.
On paper, a Los Angeles startup called Global IP was Boeing’s customer in the project. The company was behind on payments for the satellite and needed to raise over $200 million more to complete it.
Global IP didn’t immediately respond to request for comment. Its CEO Bahram Pourmand previously pledged to push ahead despite the controversy over China’s involvement. (end of excerpt)
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