Chi­nese tele­com ex­ec­u­tive ac­cused of fraud over Iran sanc­tions

Cape Breton Post - - CANADA - VAN­COU­VER

A Chi­nese telecom­mu­ni­ca­tions ex­ec­u­tive is be­ing ac­cused of fraud by the U.S. gov­ern­ment, which wants Meng Wanzhou ex­tra­dited from Canada to face the charge.

Meng ap­peared in a Van­cou­ver court Fri­day for a bail hear­ing that was told by the Crown that the United States al­leges Huawei Tech­nolo­gies used sub­sidiary Sky­com to do busi­ness with Iran, vi­o­lat­ing sanc­tions against that coun­try.

The Crown says Meng, the com­pany’s chief fi­nan­cial of­fi­cer, is al­leged to have said Huawei and Sky­com were sep­a­rate and she al­legedly lied to an ex­ec­u­tive of an un­named fi­nan­cial in­sti­tu­tion, which it as­serts put the in­sti­tu­tion at risk.

“Sky­com was Huawei. This is the al­leged fraud,’’ said John Gibb-Cars­ley, rep­re­sent­ing the At­tor­ney Gen­eral of Canada. “Sky­com em­ploy­ees were Huawei em­ploy­ees.’’

None of the al­le­ga­tions have been proven in court.

The com­pany has said it is not aware of any wrong­do­ing by Meng.

Gibb-Cars­ley said the At­tor­ney Gen­eral op­poses Meng’s re­lease on bail.

But Meng’s lawyer, David Martin, told a B.C. Supreme Court judge his client is prom­i­nent and she would not vi­o­late a court or­der if she were re­leased.

“You can rely on her per­sonal dig­nity,’’ he said, adding that to breach a court or­der “would be to hu­mil­i­ate and em­bar­rass her fa­ther, who she loves.’’

Huawei is the most pres­ti­gious tech com­pany in China and was founded by Meng’s fa­ther, Ren Zhengfei.

Meng was ar­rested Satur­day while in tran­sit at Van­cou­ver’s air­port. The court heard she was en route from Hong Kong to Mex­ico.

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.

He ar­gued the fi­nan­cial in­sti­tu­tions that did busi­ness with Huawei were the “vic­tims’’ of those mis­rep­re­sen­ta­tions. It’s al­leged that they did not know that they were in ef­fect do­ing busi­ness with Iran and could have faced se­vere fi­nan­cial con­se­quences, Gibb-Cars­ley said.

He said there is in­cen­tive for Meng to leave Canada, telling the court her fa­ther’s net worth is $3.2 bil­lion and she has no mean­ing­ful con­nec­tion to Canada, apart from spend­ing two to three weeks on va­ca­tion in Van­cou­ver ev­ery sum­mer.

In a state­ment ear­lier this week, Huawei said the com­pany com­plies with all laws and reg­u­la­tions in the coun­tries where it op­er­ates, in­clud­ing ap­pli­ca­ble ex­port con­trol, sanc­tion laws and reg­u­la­tions of the United Na­tions, the United States and the Euro­pean Union.

Huawei is the big­gest global sup­plier of net­work gear used by phone and in­ter­net com­pa­nies, and has been the tar­get of deep­en­ing U.S. se­cu­rity con­cerns. Un­der U.S. Pres­i­dent Don­ald Trump and his pre­de­ces­sor, Barack Obama, Washington has pres­sured Euro­pean coun­tries and other al­lies to limit the use of its tech­nol­ogy.

The U.S. sees Huawei and smaller Chi­nese tech sup­pli­ers as pos­si­ble fronts for Chi­nese spy­ing and as com­mer­cial com­peti­tors. The Trump ad­min­is­tra­tion says they ben­e­fit from im­proper sub­si­dies and mar­ket bar­ri­ers. Meng is a prom­i­nent mem­ber of Chi­nese so­ci­ety as deputy chair­woman of the Huawei board. The com­pany is a pri­vately held jug­ger­naut with pro­jected 2018 sales of more than US$102 bil­lion that has al­ready over­taken Ap­ple in smart­phone sales.

On TV and so­cial me­dia, com­men­ta­tors likened her ar­rest to the hy­po­thet­i­cal de­ten­tion in China of a Mark Zucker­berg sib­ling or a cousin of Steve Jobs.

U.S. and Asian stock mar­kets tum­bled af­ter news of Meng’s ar­rest as it was seen to cause an­other flare-up in ten­sions be­tween Washington and Bei­jing.

Huawei has grown to more than 170,000 em­ploy­ees and does busi­nesses in more than 170 coun­tries since Ren founded the com­pany in 1987.

Meng’s bio on the com­pany web­site says she joined in 1993 and held var­i­ous po­si­tions across the com­pany, in­clud­ing direc­tor of in­ter­na­tional ac­count­ing and CFO of Huawei Hong Kong. She holds a master’s de­gree from Huazhong Univer­sity of Sci­ence and Tech­nol­ogy.

For a pe­riod of time she was in charge of Huawei’s suc­cess­ful in­ter­na­tion­al­iza­tion ef­forts.

AP PHOTO

In this un­dated photo re­leased by Huawei, Huawei’s chief fi­nan­cial of­fi­cer Meng Wanzhou is seen in a por­trait photo. Meng ap­peared in a Van­cou­ver court Fri­day for a bail hear­ing that was told by the Crown that the United States al­leges Huawei Tech­nolo­gies used sub­sidiary Sky­com to do busi­ness with Iran, vi­o­lat­ing sanc­tions against that coun­try.

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