Meng re­jects U.S. claims of ties to Iran

The Globe and Mail (BC Edition) - - HUAWEI - MIKE HAGER XIAO XU AN­DREA WOO VAN­COU­VER With re­ports from Robert Fife and Steven Chase in Ot­tawa and Wendy Stueck and Ian Bai­ley in Van­cou­ver

United States al­leges Chi­nese tele­coms ex­ec­u­tive com­mit­ted fraud in 2013, B.C. Supreme Court hears

The United States gov­ern­ment is al­leg­ing the chief fi­nan­cial of­fi­cer of China’s Huawei Tech­nolo­gies com­mit­ted fraud in 2013, when she mis­led Amer­i­can fi­nan­cial in­sti­tu­tions about her com­pany’s links to a Hong Kong firm do­ing busi­ness in Iran, open­ing the banks to risk of vi­o­lat­ing U.S. sanc­tions.

Meng Wanzhou’s lawyers told a B.C. Supreme Court on Fri­day that the Amer­i­can al­le­ga­tions are built on faulty ev­i­dence, not­ing Huawei did own Sky­com from 2008 to 2009, but the tele­com gi­ant had di­vested fully and she had left the other firm’s board.

As a gallery full of in­ter­na­tional me­dia and con­cerned lo­cals sat rapt in down­town Van­cou­ver’s largest court­room, a le­gal ar­gu­ment over whether Ms. Meng should be awarded bail while fac­ing ex­tra­di­tion to the United States be­gan delv­ing into the de­tails of a saga that has drawn Canada into a global power strug­gle be­tween the United States and China, which has called for her re­lease.

The judge heard from fed­eral Crown coun­sel that Ms. Meng’s pat­tern of avoid­ing travel to the United States in re­cent years as well as her ex­tra­or­di­nary wealth and in­ter­na­tional con­nec­tions made her an ex­treme flight risk. Her le­gal team coun­tered that Ms. Meng would never “lose face” by em­bar­rass­ing the com­pany founded by her fa­ther and that she was will­ing to give up both her Chi­nese and Hong Kong pass­ports as well as sub­mit to high­level sur­veil­lance. If freed, her lead lawyer said, she plans to live in one of her two Van­cou­ver prop­er­ties with her hus­band and two school-aged chil­dren, who lived in the city from 2009 to 2012 while her hus­band pur­sued a mas­ter’s de­gree at a lo­cal univer­sity.

Ms. Meng, 46, be­gan her ca­reer with the com­pany as a re­cep­tion­ist in 1993 be­fore en­ter­ing into the ac­count­ing depart­ment and mov­ing up the cor­po­rate ranks, the court heard.

The U.S. al­le­ga­tions, de­tailed in a pro­vi­sional ar­rest war­rant granted last Au­gust by a New York judge, hinge on a 2013 pre­sen­ta­tion Ms. Meng gave to HSBC and its Amer­i­can af­fil­i­ate. The fi­nan­cial in­sti­tu­tion asked for the meet­ing af­ter me­dia re­ports stated her com­pany had a much closer re­la­tion­ship to Sky­com than was pre­vi­ously known.

The U.S. pro­vi­sional war­rant, granted on Aug. 22 in the East­ern Dis­trict of New York, al­leges Ms. Meng made a num­ber of mis­rep­re­sen­ta­tions, in­clud­ing that “Huawei op­er­ates in Iran in strict com­pli­ance with ap­pli­ca­ble laws, reg­u­la­tions and sanc­tions of UN, U.S. and EU,” al­though Sky­com was us­ing the U.S. fi­nan­cial sys­tem to con­duct pro­hib­ited Iran­re­lated trans­ac­tions. Sev­eral of HSBC’s risk com­mit­tees re­lied, at least in part, on this pre­sen­ta­tion and con­tin­ued ser­vic­ing Huawei, ac­cord­ing to court doc­u­ments.

David Martin, Ms. Meng’s lead coun­sel asked why HSBC did not seek re­dress through any le­gal ac­tion if the fraud was com­mit­ted. He also said no crim­i­nal charges have been levied against Huawei, un­like fel­low Chi­nese tele­com gi­ant ZTE, which agreed to pay up to US$1.4-bil­lion in pe- nal­ties this sum­mer af­ter break­ing the trade em­bargo with Iran.

“The U.S. gov­ern­ment doesn’t hes­i­tate to charge large en­ti­ties,” Mr. Martin noted.

None of the al­le­ga­tions against Ms. Meng has been proven in court and the bail hear­ing re­sumes on Mon­day, when se­cu­rity ex­perts are ex­pected to de­tail plans to en­sure she stays in Van­cou­ver if she is granted bail.

Ms. Meng’s ar­rest at Van­cou­ver In­ter­na­tional Air­port last week­end came on the same day U.S. Pres­i­dent Don­ald Trump and Chi­nese Pres­i­dent Xi Jin­ping agreed to a tem­po­rary trade-war truce at the Group of 20 sum­mit in Ar­gentina, which Prime Minister Justin Trudeau also at­tended. Mr. Trudeau and U.S. na­tional-se­cu­rity ad­viser John Bolton have said they both knew of the ar­rest plans in ad­vance.

Ms. Meng walked into the high-se­cu­rity Van­cou­ver court­room on Fri­day morn­ing up­beat and smil­ing, and clad in a green prison sweat­suit. Be­fore the judge en­tered the cham­bers, she shared a hand­shake with Mr. Martin and then sat in a bul­let­proof de­fen­dant’s box, where she asked for a pen and a notepad.

Near the end of her hear­ing, Ms. Meng asked for some tis­sue pa­per to dab her eyes as her lead lawyer spoke of the many peo­ple who of­fered up char­ac­ter ref­er­ences in sup­port of his client.

Frank Xu was one of dozens of res­i­dents to at­tend the hear­ing. Mr. Xu, who at­tended Huazhong Univer­sity of Sci­ence and Tech­nol­ogy in China, where Ms. Meng grad­u­ated, said he paid a lot of at­ten­tion to this case be­cause of that con­nec­tion, but also be­cause he is a Huawei cell­phone user.

“[If] those al­le­ga­tions are proven true, she will be in jail for 30 years. That num­ber, I re­mem­ber it very clearly,” he said out­side the court­house.

JANE WOLSAK/THE CANA­DIAN PRESS

In this court­room sketch, Meng Wanzhou, left, the chief fi­nan­cial of­fi­cer of Huawei Tech­nolo­gies, sits be­side a trans­la­tor dur­ing a bail hear­ing at B.C. Supreme Court in Van­cou­ver on Fri­day.

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