Huawei's Meng faces charges over alleged conspiracy to defraud banks

Cheryl Sanders
December 8, 2018

A senior Chinese telecoms executive committed fraud when she lied about links between Huawei and a shell company used to sell telecommunications equipment to Iran in breach of USA sanctions, Canadian prosecutors have told a Vancouver court.

From 2009 to 2014, the court heard, Huawei used Skycom to transact business in Iran despite USA and European Union bans.

SkyCom employees used Huawei email addresses and its management were Huawei employees, according to the prosecutor.

"Dave Lee of the BBC reported "[gasps] in the court" when it was announced that Meng could be hit with "multiple charges each with maximum penalty of 30 years in prison".

He said one of the glaring deficiencies in the allegations is that the summary of the case doesn't differentiate between time periods.

While personal details are scant, she is married and has a son and a daughter, Huawei said. Huawei has denied violating sanctions.

Martin also argued that the outline provided by Canada does not support the case.

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

The Attorney General opposed Meng's release on bail.

She is specifically accused of lying to U.S. banks about the use of a covert subsidiary to sell to Iran in breach of sanctions.

Meng's surprise arrest on Saturday is the latest salvo in a feud over trade and technology that has pitted the United States against China, with Canada caught in the middle. The court heard she was en route from Hong Kong to Mexico. "SkyCom is Huawei", he told the court.

In an interview with the Australian Financial Review, former Central Intelligence Agency chief Michael Hayden said there is evidence that Huawei spies for Beijing.

Gibb-Carsley said the banks were "victim institutions" of fraud by Meng.

Chinese Foreign ministry spokesman Geng Shuang said on Friday that neither Canada nor the United States had provided China any evidence that Meng had broken any law in those two countries, and reiterated Beijing's demand that she be released.

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's affordable smartphones have made strong inroads in the developing world, but the company has faced repeated setbacks in major Western economies over security concerns. A Canadian official authorized her arrest in November.

Reporters in attendance tweeted details from the hearing, and noted the shocked reaction from the gathered crowd upon learning the possible severity of Meng's punishment were she to face trial and be found guilty. That was about six years after the company was founded to sell phone switches. "They had been warned, and finally we had to prosecute that", he said. She holds a master's degree from Huazhong University of Science and Technology. She's likely his heir apparent. Meng's father is worth $3.2 billion.

Huawei says Ren was a standout in the Chinese military's engineering corps, retiring in 1983 when the unit disbanded.

Huawei, he explained, is one company the USA has been particularly concerned about.

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