After a long years of suspicion from US authorities, Huawei is now finally standing trial for fraud. In a bail hearing that was held today for Huawei’s chief financial officer, who was arrested in Canada on Saturday at the request of US law enforcement. The CFO, Meng Wanzhou, is facing extradition to the US for conspiring to defraud banking institutions, according to TheStar Vancouver.
The US has an arrest warrant out for Meng which was issued by a New York court on August 22nd. It has 60 days from the time of Meng’s arrest on Saturday to provide Canadian courts with evidence and intent.
Meng was arrested in Vancouver (Canada) during a flight transfer where she was flying from Hong Kong to Mexico. Canada’s prosecutor John Gibb-Carsley said that Meng travels frequently to the US and has a son attending school in Boston but has made no trips since March 2017, implying that she began to avoid traveling to the US after Huawei started to be probed by the US Justice Department. Still, a number of Huawei executives continued to visit the US after the probe began, suggesting that Meng’s position differed from theirs.
Meng served on the board for a Hong Kong-based company called Skycom, which allegedly did business with Iran between 2009 and 2014. US banks worked with Huawei at this time, so Iran sanctions were violated indirectly, and Meng therefore committed fraud against these banks. Skycom reportedly had connections to Huawei and at the bail hearing today, Gibb-Carsley argued that Skycom was an unofficial subsidiary of Huawei’s, using the same company logo. Huawei is SkyCom, he said, This is the crux, I say, of the alleged fraud.
Huawei’s comment on the arrest saying: The company has been provided very little information regarding the charges and is not aware of any wrongdoing by Ms. Meng. The company believes the Canadian and US legal systems will ultimately reach a just conclusion. Huawei complies with all applicable laws and regulations where it operates, including applicable export control and sanction laws and regulations of the UN, US and EU.
In Huawei and Meng’s defense, her lawyer, David Martin, introduced a 2013 PowerPoint presentation that Meng had once given to explain to a bank in Hong Kong that Huawei had not violated any US sanctions.
The hearing that was held today also examined whether Meng would be a flight risk if she was granted the $1 million bail, part of the argument Gibb-Carsley was pushing. Defense lawyer Martin responded by explaining the Chinese emphasis on saving face, and how Meng wouldn’t want her father and Huawei to look bad. Even more than that, “she would not embarrass China itself,” Martin said.
