U.S. seeks extradition of Huawei CFO over Iran links, court hears

VANCOUVER/LONDON (Reuters) – U.S. prosecutors want to extradite a top executive of China’s Huawei Technologies Co Ltd [HWT.UL] to face accusations she covered up links to a company that sold equipment to Iran despite U.S. sanctions, a Vancouver court heard on Friday.

Huawei Chief Financial Officer Meng Wanzhou, 46, is the daughter of the founder of Huawei, which is the world’s largest supplier of telecommunications network equipment and which U.S. intelligence agencies allege is linked to China’s government.

She was arrested in Canada on Dec. 1 at the request of the United States, a move that has roiled global stock markets on fears it could escalate a trade war between the United States and China.

The court heard that the U.S. investigation stemmed from a 2013 Reuters report here that Huawei used Hong Kong-base Skycom Tech Co Ltd to carry out business in Iran despite U.S. and European Union bans.

Huawei has previously denied it violated any such sanctions. A spokesman for Huawei was not immediately available on Friday to comment on the allegations against Meng.

Friday’s court hearing is intended to decide on whether Meng can post bail or if she is a flight risk and should be kept in detention.

The United States has 60 days to make a formal extradition request, which a Canadian judge will weigh to determine whether there is a strong case against Meng. Then it is up to Canada’s justice minister to decide whether to extradite her.

If extradited to the United States, Meng would face charges of conspiracy to defraud multiple financial institutions, the court heard, with a maximum sentence of 30 years for each charge.

The prosecutor opposed Meng’s release on bail, arguing she is a high flight risk, has few ties to Vancouver and that her family’s wealth would mean than even a multi-million-dollar surety would not weigh heavily should she breach conditions.

Meng’s lawyer, David Martin, said her prominence makes her unlikely to breach any court orders.

“You can trust her,” he said. Fleeing “would humiliate and embarrass her father, whom she loves,” he argued.

IRAN BUSINESS

The U.S. case against Meng involves a Hong Kong-based company called Skycom Tech Co Ltd. that had an office in Tehran. Huawei has previously described Skycom as one of its “major local partners” in Iran.

In January 2013, Reuters reported the company was closely tied to Huawei and Meng and had tried to sell embargoed Hewlett-Packard computer equipment to Iran’s largest mobile-phone operator.

In 2007, a management company controlled by Huawei’s parent company held all of Skycom’s shares. At the time, Meng served as the management firm’s company secretary. Meng also served on Skycom’s board between February 2008 and April 2009, according to Skycom records filed with Hong Kong’s Companies Registry.

Huawei used Skycom’s Tehran office to provide mobile network equipment to several major telecommunications companies in Iran, people familiar with the company’s operations have said. Two of the sources said that technically Skycom was controlled by Iranians to comply with local law but that it effectively was run by Huawei.

Huawei and Skycom were “the same,” a former Huawei employee who worked in Iran said on Friday.

The United States has been looking since at least 2016 into whether Huawei violated U.S. sanctions against Iran, Reuters reported in April. Huawei has denied it violated any such sanctions.

U.S. intelligence agencies also allege that Huawei is linked to China’s government and that its equipment could contain “backdoors” for use by government spies. No evidence has been produced publicly and the firm has repeatedly denied the claims.

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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.

Chinese state media have slammed Meng’s detention, accusing the United States of trying to “stifle” Huawei and curb its global expansion.

Huawei said on Wednesday that “the company has been provided very little information regarding the charges and is not aware of any wrongdoing by Ms. Meng.”

Reporting by Julie Gordon in Vancouver and Anna Mehler Paperny in Toronto; Additional reporting by David Ljunggren in Ottawa; Ben Blanchard and Yilei Sun in Beijing; and Sijia Jiang in Hong Kong; Writing by Denny Thomas and Rosalba O’Brien; Editing by Sonya Hepinstall, Muralikumar Anantharaman and Susan Thomas