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Huawei CFO accused of Iran sanctions cover-up; hearing adjourned for Monday

US prosecutors argue that Meng was not truthful to banks who asked her about links between the two firms

Reuters  |  London 

Meng Wanzhou
Meng Wanzhou

Huawei Technologies Co Ltd's faces US accusations that she covered up her company's links to a firm that tried to sell equipment to Iran despite sanctions, a Canadian said on Friday, arguing against giving her bail while she awaits extradition.

The case against Meng Wanzhou, who is also the daughter of the of Huawei, stems from a 2013 report about the company's close ties to Hong Kong-based Tech Co Ltd, which attempted to sell US equipment to Iran despite US and bans, the told a court.

US prosecutors argue that Meng was not truthful to banks who asked her about links between the two firms, the court heard on Friday. If extradited to the United States, Meng would face charges of conspiracy to defraud multiple financial institutions, the court heard, with a maximum sentence of 30 years for each charge.
 

No decision was reached after nearly six hours of arguments and counter-arguments, and the hearing was adjourned until Monday 10:00 a.m. Pacific Time (1800 GMT).

Meng, 46, was arrested in on Dec. 1 at the request of the The arrest was on the same day that U.S. met in with China's Xi Jinping to look for ways to resolve an escalating trade war between the world's two largest economies.

The of her arrest has roiled stock markets and drawn condemnation from Chinese authorities, although Trump and his top economic advisers have downplayed its importance to trade talks after the two leaders agreed to a truce.

Friday's court hearing was intended to decide on whether Meng can post bail or if she should be kept in detention.

The opposed bail, arguing that Meng was a high flight risk with few ties to and that her family's wealth would mean than even a multi-million-dollar surety would not weigh heavily should she breach conditions.

Meng's lawyer, David Martin, said her prominence made it unlikely she would breach any court orders.

"You can trust her," he said. Fleeing "would humiliate and embarrass her father, whom she loves," he argued.

The has 60 days to make a formal extradition request, which a Canadian will weigh to determine whether the case against Meng is strong enough. Then it is up to Canada's to decide whether to extradite her.

A for Huawei said on Friday the company has "every confidence that the Canadian and US will reach the right conclusion." The company has said it complies with all applicable export control and sanctions laws and other regulations.
 

Iran Business


The US case against Meng involves Skycom, which had an office in and which Huawei has described as one of its "major local partners" in Iran.

In January 2013, reported that Skycom, which tried to sell embargoed computer equipment to Iran's largest mobile-phone operator, had much closer ties to Huawei and Meng than previously known.

In 2007, a management company controlled by Huawei's parent company held all of Skycom's shares. At the time, Meng served as the management firm's Meng also served on Skycom's board between February 2008 and April 2009, according to records filed with Hong Kong's Companies Registry.

Huawei used Skycom's office to provide to several major companies in Iran, people familiar with the company's operations have said. Two of the sources said that technically was controlled by Iranians to comply with but that it effectively was run by Huawei.

Huawei and Skycom were "the same," a former Huawei employee who worked in Iran said on Friday.

A Huawei told in 2013: "Huawei has established a trade compliance system which is in line with industry best practices and our business in Iran is in full compliance with all applicable laws and regulations including those of the U.N. We also require our partners, such as Skycom, to make the same commitments."
 

US case

The has been looking since at least 2016 into whether Huawei violated US sanctions against Iran, Reuters reported in April.

The case against Meng revolves around her response to banks, who asked her about Huawei's links to Skycom in the wake of the 2013 Reuters report. US prosecutors argue that Meng fraudulently said there was no link, the court heard on Friday.

US investigators believe the misrepresentations induced the banks to provide services to Huawei despite the fact they were operating in sanctioned countries, Canadian court documents released on Friday showed.

The hearing did not name any banks, but sources told Reuters this week that the probe centered on whether Huawei had used to conduct illegal transactions. HSBC is not under investigation.

US intelligence agencies have also alleged that Huawei is linked to China's government and its equipment could contain "backdoors" for use by government spies. No evidence has been produced publicly and the firm has repeatedly denied the claims.

The probe of Huawei is similar to one that threatened the survival of China's ZTE Corp, which pleaded guilty in 2017 to violating U.S. laws that restrict the sale of American-made technology to Iran. ZTE paid a $892 million penalty.

 

First Published: Sat, December 08 2018. 09:01 IST
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