Chi­nese tele­com exec ap­pears at bail hear­ing in Van­cou­ver

Houston Chronicle - - BUSINESS - By Jim Morris, Rob Gil­lies and Paul Wiseman

VAN­COU­VER, Bri­tish Columbia — A top Chi­nese telecom­mu­ni­ca­tions ex­ec­u­tive fac­ing pos­si­ble ex­tra­di­tion to the U.S. ap­peared in court Fri­day as she sought bail in a case that has rat­tled mar­kets and raised doubts about the U.S. be­ing able to reach a truce in its trade war with China.

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 U.S. al­le­ga­tions that Huawei used a shell com­pany to ac­cess the Ira­nian mar­ket in deal­ings that con­tra­vene U.S. sanc­tions.

Prose­cu­tor John Gibb-Cars­ley said Meng, who has vast fi­nan­cial re­sources as the daugh­ter of Huawei’s founder, has in­cen­tive to flee Canada be­cause she faces fraud charges in the U.S. that could bring up to 30 years in prison.

The prose­cu­tor said Meng as­sured U.S. banks that Huawei and the shell com­pany al­leged to have done busi­ness with Iran, called Sky­com, were sep­a­rate com­pa­nies, but in fact Sky­com and Huawei were one and the same.

“Ms. Meng per­son­ally rep­re­sented to those banks that Sky­com and Huawei were sep­a­rate, when in fact they were not sep­a­rate,” Gibb-Cars­ley said. “Sky­com was Huawei.”

Meng has con­tended Huawei sold Sky­com in 2009.

Gibb-Cars­ley said the war­rant for Meng’s ar­rest was is­sued in New York on Aug. 22. He said Meng was aware of the U.S. in­ves­ti­ga­tion and had avoided the U.S. since March 2017, even though her teenage son goes to school in Bos­ton.

Meng was ar­rested in Van­cou­ver on Satur­day en route to Mex­ico from Hong Kong.

Meng’s lawyer, David Martin, dis­puted the prose­cu­tor’s call to deny bail. “The fact a per­son has worked hard and has ex­tra­or­di­nary re­sources can­not be a fac­tor that would ex­clude them from bail,” he said.

Martin said Meng’s own per­sonal in­tegrity would not al­low her to go against a court or­der and that she would not em­bar­rass her fa­ther, com­pany founder Ren Zhengfei, by breach­ing such an or­der. He said Meng had agreed to wear an an­kle mon­i­tor.

Meng’s ar­rest came as a jar­ring sur­prise af­ter Pres­i­dents Don­ald Trump and Xi Jin­ping agreed to a trade truce last week­end in Buenos Aires, Ar­gentina.

The case is the lat­est de­vel­op­ment in a sur­pris­ing le­gal wran­gle that raises doubts about whether a U.S.-China trade cease-fire can hold.

Fears of re­newed U.S.-China trade hos­til­i­ties have rat­tled global fi­nan­cial mar­kets. They tum­bled Thurs­day. Stocks re­gained their equi­lib­rium Fri­day in Europe and Asia af­ter con­cil­ia­tory words from Bei­jing but fell again on Wall Street.

Trump him­self sought to in­ject a note of op­ti­mism into the pro­ceed­ings, go­ing on Twit­ter be­fore dawn Fri­day to say: “China talks are go­ing very well!”

Huawei has been a sub­ject of U.S. na­tional se­cu­rity con­cerns for years, and Meng’s case echoes well be­yond tar­iffs or mar­ket ac­cess. Wash­ing­ton and Bei­jing are locked in a clash be­tween the world’s two largest economies for eco­nomic and po­lit­i­cal dom­i­nance for decades to come.

“It’s a much broader is­sue than just a trade dis­pute,” said Amanda DeBusk, chair of in­ter­na­tional trade prac­tice at Dechert LLP. “It pulls in: Who is go­ing to be the world leader es­sen­tially . ... It’s a Cold War sit­u­a­tion.”

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