Huawei CFO back in Canada court as bail hearing set to wrap

By Julie Gordon

VANCOUVER (Reuters) - A top executive at Chinese telecoms giant Huawei Technologies is set to return to a Vancouver courtroom on Tuesday, as the judge weighs final issues in determining whether she should be freed on bail while awaiting extradition proceedings.

Huawei Chief Financial Officer Meng Wanzhou was arrested by Canadian authorities on Dec. 1 at the request of the United States. Tuesday will be the third day of bail hearings in a British Columbia court, with China criticizing her continued detention and demanding her immediate release.

Meng, 46, faces U.S. accusations that she misled multinational banks about Huawei's control of a company operating in Iran, putting the banks at risk of violating U.S. sanctions and incurring severe penalties, court documents said.

The judge on Monday rolled the proceedings over to Tuesday because he wanted to hear more from both sides about the issue of surety - who will take responsibility for Meng's actions if she were released.

Meng's lawyer David Martin had offered her husband as surety, but the judge and the public prosecutor questioned whether Liu Xiaozong, Meng's husband, could perform this duty as he is not a resident of British Columbia and would not suffer if she were to breach her bail conditions.

"If Ms. Meng were to flee, were to abscond, Mr Liu would not be left behind here," public prosecutor John Gibb-Carsley said. "He would go with her."

Intent on getting Meng out of detention and into one of her two luxury homes in the city, defense lawyer Martin is offering up high-tech surveillance devices and a 24-hour security detail to ensure his client does not flee.

He has also proposed a C$15 million ($11.3 million) bail guarantee and pledged Meng would hand over all her passports and travel documents to Canadian police, the court heard.

BEIJING WARNS ON "BULLYING"

The arrest has roiled markets over fears it will exacerbate tensions between the United States and China in trade negotiations that both sides have agreed must be concluded by March 1.

Beijing has demanded Meng's immediate release and threatened "consequences" for Canada. But both Chinese and U.S. officials appear to be avoiding linking her arrest to the trade dispute.

Speaking at a forum in Beijing on Tuesday, the Chinese government's top diplomat, State Councillor Wang Yi, said the government kept constant watch on the safety of Chinese citizens abroad, though did not directly mention Meng's case.

"For any bullying that wantonly violates the legitimate rights and interests of Chinese citizens, China will never sit idly by," state television quoted him as saying.

Asked whether Wang was referring to Meng, Chinese Foreign Ministry spokesman Lu Kang said China's complaints to Canada and the United States about the case were the same as the position Wang had laid out earlier in the day about defending Chinese overseas.

Huawei is the world's largest supplier of telecommunications network equipment and second-biggest maker of smartphones, with revenue of about $92 billion last year. Unlike other big Chinese technology firms, it does much of its business overseas.

U.S. officials allege the telecom giant was trying to use multinational banks to move money out of Iran. Companies are barred from using the U.S. financial system to funnel goods and services to sanctioned entities.

Huawei and its lawyers have said the company operates in strict compliance with applicable laws, and is confident that both the Canadian and U.S. legal systems "will reach a just conclusion".

(Reporting by Julie Gordon in Vancouver; Additional reporting by Ben Blanchard in Beijing; Editing by Stephen Coates and Muralikumar Anantharaman)