Huawei CFO seeks bail on health concerns; Canada wants her in jail

China has demanded her immediate release. The arrest has roiled global markets as investors worried it could torpedo attempts to thaw trade tensions between Washington and Beijing.

FILE: People gather at the Huawei stand during the Mobile World Conference in Shanghai on 27 June 2018. Picture: AFP

TORONTO/BEIJING - The CFO of China’s Huawei Technologies Co Ltd argued that she should be released on bail while awaiting an extradition hearing, citing her longstanding ties to Canada, properties she owns in Vancouver and fears for her health while incarcerated, court documents showed on Sunday.

Huawei Chief Financial Officer Meng Wanzhou is fighting to be released on bail after she was arrested on 1 December in Vancouver at the request of the United States (US). She is also fighting the extradition request, and China has protested her arrest to US and Canadian officials.

Wanzhou (46) faces US accusations that she misled multinational banks about Huawei’s control of a company operating in Iran. This deception put the banks at risk of violating US sanctions and incurring severe penalties, according to court documents seen by Reuters. US officials allege that Huawei was trying to use the banks to move money out of Iran.

China has demanded her immediate release. The arrest has roiled global markets as investors worried it could torpedo attempts to thaw trade tensions between Washington and Beijing.

The US stock futures fell 0.71% in early Asia trading, extending their negative tone from Friday.

In a sworn affidavit, Meng, the daughter of Huawei’s founder, said she is innocent and will contest the allegations at trial in the US if she is surrendered there.

Wanzhou said she was taken to a hospital for treatment for hypertension after being detained. She cited hypertension in a bail application seeking her release pending an extradition hearing. She also noted that she owns two homes in Vancouver worth millions of dollars each.


Her family assured the court she would remain in Vancouver if she was granted bail, according to the court documents. Her husband said he plans to bring the couple’s daughter to Vancouver to attend school during the proceedings. Wanzhou will be back in the court for a bail hearing on Monday.

Huawei, the world’s biggest supplier of telecoms network equipment and second biggest smartphone seller, did not offer an immediate comment on the court documents. The company, a market leader across many countries in Europe, Asia and Africa, previously said it has complied with all applicable rules.

Earlier on Sunday, China’s foreign ministry summoned the US ambassador to lodge a “strong protest” over the arrest, and said the US should withdraw its arrest warrant.

Chinese Vice Foreign Minister Le Yucheng told US ambassador Terry Branstad the United States had made an “unreasonable demand” on Canada to detain Meng while she was passing through Vancouver, China’s Foreign Ministry said.

“The actions of the US seriously violated the lawful and legitimate rights of the Chinese citizen, and by their nature were extremely nasty,” Le told Branstad.

China urged the United States to withdraw the arrest warrant, Le added. “China will respond further depending on US actions,” he said, without elaborating.

On Saturday, Le warned the Canadian ambassador there would be severe consequences if it did not immediately release Wanzhou. There was no immediate reaction from Canada. On Friday, Foreign Minister Chrystia Freeland told reporters Canada’s relationship with China was important, and the country’s ambassador in Beijing has assured the Chinese consular access will be provided to Wanzhou.


The US has been looking since at least 2016 into whether Huawei shipped US-origin products to Iran and other countries in violation of US export and sanctions laws, Reuters reported in April.

The US case against Meng involves Skycom Tech Co. Ltd, which Huawei has described as one of its “major local partners” in Iran. 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 told Reuters.

In December 2012, Reuters reported that documents showed Skycom had tried to sell embargoed Hewlett-Packard computer equipment in 2010 to Iran’s largest mobile-phone operator. Reuters later reported that Skycom had much closer ties to Huawei and Meng than previously known.

In Canadian court papers made public on Friday, an investigation by US authorities found Huawei operated Skycom as an “unofficial subsidiary” to conduct business in Iran.

Huawei said its Iran operations were “in strict compliance with applicable laws, regulations and sanctions” of the United Nations, US and European Union, according to Canadian court documents released on Sunday.

The US officials allege that Meng and other Huawei representatives misled financial institutions about Huawei’s control of Skycom, so the Chinese company could gain access to the international banking system. As a result, an unidentified financial institution cleared more than $100 million worth of transactions related to Skycom through the US between 2010 and 2014, the court papers said.

On Thursday, Reuters identified HSBC Holdings Plc as one of the banks involved in the Meng case and, citing sources, reported that the probe included possible bank fraud.

Companies are barred from using the US financial system to funnel goods and services to sanctioned entities.

US Senator Marco Rubio said on Sunday he would “100% absolutely” introduce a measure in the new Congress that would ban Chinese telecom companies from doing business in the United States.

“We have to understand Chinese companies are not like American companies. OK. We can’t even get Apple to crack an iPhone for us in a terrorist investigation,” he told CBS “Face the Nation.”

“When the Chinese ask a telecom company, we want you to turn over all the data you’ve gathered in the country you’re operating in, they will do it. No court order. Nothing like that. They will just do it. They have to. We need to understand that.”

Rubio was a strong critic of China’s ZTE Corp, which pleaded guilty in 2017 to violating US laws that restrict the sale of American-made technology to Iran.