VANCOUVER/TORONTO (Reuters) – U.S. prosecutors want a top executive of China’s Huawei Technologies Co Ltd [HWT.UL], the world’s largest supplier of telecommunications network equipment, to face charges of fraud linked to the skirting of Iran sanctions, a Vancouver court heard on Friday.
Huawei Chief Financial Officer Meng Wanzhou, 46, daughter of the founder of the company, which U.S. intelligence agencies allege is linked to China’s government, was arrested in Canada on Dec. 1 at the request of the United States.
U.S. prosecutors want to extradite Meng to face accusations that she misrepresented Huawei’s relationship to a company they said had transacted business in Iran despite U.S. sanctions, according to evidence read in a bail hearing in court on Friday.
The news of Meng’s arrest has roiled global stock markets on fears it could escalate a trade war between the United States and China after a truce was agreed last week between President Donald Trump and China’s leader Xi Jinping.
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.
Friday’s hearing was to present arguments for and against releasing Meng while her case proceeds. A judge could release Meng on no conditions, on strict conditions, or decide to keep her in custody for the duration.
From 2009 to 2014, the court heard, Huawei used Hong Kong-base Skycom Tech Co Ltd to carry out business in Iran despite U.S. and European Union bans.
In January 2013, Reuters reported here that Skycom, which attempted to sell embargoed Hewlett-Packard computer equipment to Iran’s largest mobile-phone operator, had much closer ties to Huawei than previously known.
Meng, who also has used the English names Cathy and Sabrina, served on the board of Skycom between February 2008 and April 2009, according to Skycom records and several other past and present Skycom directors appear to have connections to Huawei.
The United States has been looking since at least 2016 into whether Huawei violated U.S. sanctions against Iran, Reuters reported in April.
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.
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.
Trump did not know about the arrest in advance, two U.S. officials said on Thursday.
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.”
A Huawei spokesman declined to comment on Thursday before Meng’s court appearance and said that Wednesday’s statement still stands.
Huawei staff briefed on an internal memo told Reuters on Friday the company had appointed Chairman Liang Hua as acting CFO following Meng’s arrest.
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