Chinese technology company Huawei has found itself in a controversy after a former employee was wrongfully detained for more than eight months on extortion charges.

Li Hongyuan, 42, who had worked at Huawei for more than 12 years, was arrested by Shenzhen police on Dec 16 and detained until Aug 23, when Shenzhen prosecutors decided to drop the charges because of "unclear criminal facts and insufficient evidence", according to two documents from the city's Longgang district procuratorate.

Li recently posted the documents in a WeChat group of former Huawei employees to prove his innocence.

Huawei alleged that Li had extorted 330,000 yuan ($46,800) from the company to keep quiet about his supervisor's misconduct. The supervisor had asked his secretary to pay Li out of the secretary's private account, the documents said.

The nature of the misconduct has not been disclosed.

However, the procuratorate decided to drop the charges after police investigations failed to provide enough evidence.

It also decided to give Li compensation of more than 100,000 yuan for damage to his physical freedom and reputation, they said.

Further, the procuratorate has sent letters to Huawei and the employer of Li's father to restore Li's reputation.

Li told news website The-Paper.cn that he had sent an anonymous email to Huawei's internal email account to complain about misconduct by his supervisor in November 2016.

Li was removed from his management position in June 2017 and was informed by an HR representative that the company did not want to renew his contract in December.

Li negotiated with the company's HR, who agreed to pay him two-year's salary as compensation in January 2018. Li recorded the negotiation, ThePaper.cn quoted him as saying.

Huawei asked one of its legal staff to report the case to Shenzhen police in December 2018. The staff alleged that Li threatened to leak company documents while negotiating his compensation. The police discredited that claim after questioning Li three times.

Later that month, Huawei made another report to police, alleging that Li had extorted the 330,000 yuan from the company for not publicizing his supervisor's misconduct, according to the report.

Li said the 330,000 yuan was compensation from the company. To prove it, Li asked his wife to submit the recording of his negotiation with HR to prosecutors in April after he met with his defense lawyer, the report said.

Huawei issued a statement on Monday night, saying that the company has the right to report illegal behavior to law enforcement authorities.

"If Li thinks his rights and interests have been violated, we support his right to use legal means to protect them, including suing the company," the statement said.

The incident has met with harsh criticism on social media, with many netizens commenting with numbers like 996 and 251. "996" refers to the culture of many Chinese technology company employees working 9 am to 9 pm, six days a week, and "251" refers to Li being detained for 251 days.

The hashtag "Former Huawei employee was detained for 251 days" had been read 220 million times by Tuesday. Another hashtag, "Former Huawei employee who has been detained wants an apology from the company", had been read 230 million times.