Huawei executive faces fraud charges in US

Frederick Owens
December 8, 2018

A prosecutor for the Canadian government urged the court not to grant bail, saying the charges against Meng Wanzhou, the chief financial officer for Chinese telecom giant Huawei, involve USA allegations that Huawei used a shell company to access the Iran market in dealings that contravene United States sanctions.

Chinese state media have slammed Meng's detention, accusing the United States of trying to "stifle" Huawei and curb its global expansion.

Meng's surprise arrest on Saturday is the latest salvo in a feud over trade and technology that has pitted the USA against China, with Canada caught in the middle.

Gibb-Carsley said the banks were "victim institutions" of fraud by Meng. This is also believed to have helped Huawei "circumvent U.S. sanctions by telling financial institutions that a Huawei subsidiary was a separate company".

He said Meng was aware of the United States investigation and had avoided the United States since March 2017, even though her teenage son goes to school in Boston.

According to Canadian counsel John Gibb-Carsley, the Huawei executive misrepresented her firm's relationship with a subsidiary, Skycom, which was allegedly conducting business with Iranian firms in violation of U.S. sanctions.

Meng's lawyer, David Martin, disputed the prosecutor's call to deny bail, saying, "The fact a person has worked hard and has extraordinary resources can not be a factor that would exclude them from bail".

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Gibb-Carsley told the hearing that Reuters reported in 2013 that Huawei was operating Skycom, triggering Huawei executives including Meng to allegedly make a series of misrepresentations. While there is some fear that the arrest could hurt talks between the USA and China to end the current trade war between the two countries, Canadian prosecutors have called Ming a flight risk and have requested that the court place her in a detention center. The court heard she was en route from Hong Kong to Mexico.

Huawei CFO Meng Wanzhou, who was arrested on an extradition warrant, appears at her B.C. Supreme Court bail hearing along with a translator, in a drawing in Vancouver, British Columbia, Canada December 7, 2018.

CNN, quoting an unnamed official, said the United States saw the arrest as providing leverage in US-China trade talks - although White House trade advisor Peter Navarro has denied any link to the dialogue.

Huawei was founded to sell phone switches but it is now the world's biggest supplier of network gear for phone and internet companies. The United States has pressured European countries and other allies to limit the use of its technology. A Canadian official authorized her arrest in November.

"If you have infinite resources, the value of pledges diminishes", the lawyer representing Canada's attorney general said. She's likely his heir apparent.

Meng's bio on the company website says she joined in 1993 and held various positions across the company, including director of global accounting and CFO of Huawei Hong Kong. Meng's father is worth $3.2 billion. His parents were school teachers and he grew up in the remote mountainous town in Guizhou province.

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