Iran connection emerges as Canada's envoy briefs China on Huawei arrest

Huawei chief financial officer Meng Wanzhou was arrested in Vancouver last Saturday and reportedly charged with fraud for telling UK-based banking company HSBC that the Chinese tech giant was in full compliance with United States sanctions against Iran while one of its subsidiaries was not in compliance of the restrictions.

Two state-run media outlets in China have come out with blistering attacks on the U.S. related to the arrest in recent days of Huawei's CFO Meng Wanzhou, who faces extradition here, saying the arrest is just a backdoor way for the USA to try to hobble the company.

Meng is accused of "conspiracy to defraud multiple financial institutions" and if convicted faces more than 30 years in prison in the U.S., the Canadian lawyer said while asking the Vancouver court to deny her bail request, AFP reported.

The case was adjourned until Monday by Justice William Ehrcke to allow the defence more time to complete its submissions.

He said she had denied to United States bankers any direct connections between Huawei and SkyCom, when in fact "SkyCom is Huawei".

Gibb-Carsley told the B.C. Supreme Court hearing that Reuters reported in 2013 that Huawei was operating Skycom and had attempted to import USA -manufactured computer equipment into Iran in violation of sanctions.

John Gibb-Carsley said Meng is alleged to have said Huawei and Skycom were separate companies in a meeting with an executive of a financial institution, misleading the executive and putting the institution at risk of financial harm and criminal liability.

According to Canadian court documents seen by Reuters, evidence shows SkyCom was "sold" in 2009 not to a purportedly unrelated entity but one also controlled by Huawei until at least 2014.

Japan is set to ban government use of telecom products made by Chinese tech giants Huawei and ZTE on concerns about cybersecurity, reports said on Friday.

Meng's lawyer, David Martin, said her prominence made it unlikely she would breach any court orders.

In a practice highly unusual in Chinese tradition, she adopted her family name not from her father but her mother, Meng Jun, who was Mr Ren's first wife. Until then, she will remain in custody.

"These are organizations, ultimately, tightly tied to the Chinese security apparatus, and we think there are some real, serious issues there", Harper said.

The arrest was made at Washington's request as part of a United States investigation of an alleged scheme to use the global banking system to evade U.S. sanctions against Iran, according to people familiar with the probe.

Huawei said Friday that it would "continue to follow the bail hearing", expressing "every confidence that the Canadian and United States legal systems will reach the right conclusion".

United States investigators believe the misrepresentations induced the banks to provide services to Huawei despite the fact they were operating in sanctioned countries, Canadian court documents released yesterday showed. Martin identified the firm as HSBC Holdings Plc, but he disputed the US allegation that Meng misrepresented anything to that financial institution.

A Huawei spokesman declined to comment on Thursday before Meng's court appearance and said that Wednesday's statement still stands. Countries that have rejected the company's technology include Japan, which said in recent days it would ban government purchases of Huawei (as well as ZTE) technology. Fighting extradition proceedings can take years.

  • Rogelio Becker