Meng is accused of committing fraud because she told banks in the United States that Huawei and Skycom, a Hong Kong-based company reportedly doing business with Iran, had no connection. However, the court heard from lawyers representing the Canadian government that Huawei effectively controlled Skycom.
Meng, 46, was initially granted a publication ban by the British Columbia (BC) Supreme Court, which was subsequently lifted ahead of her hearing.
She was arrested in Vancouver on Dec. 1, and is sought for extradition by the United States. The United States issued her arrest warrant on Aug. 22, and BC authorities issued a provisional arrest warrant for her on Nov. 30.
In making their case for denying her bail, Canadian government lawyers said Meng has no meaningful connections to Vancouver, and that her massive resources make the amount of her bail pledge irrelevant. Meng pledged C$1 million for bail.
“If you have infinite resources, the value of pledges diminishes,” said John Gibb-Carsley, attorney for Canada’s justice department. Meng’s father is worth $3.2 billion.
Meng’s “extensive pattern of dishonesty” was cited as another reason to deny her bail, as was the fact that she stopped traveling to the United States after learning about the investigation into her case.
Meng’s lawyer, David Martin, said the Huawei executive would not breach court orders because of her “personal dignity.” He argued that her wealth should not disqualify her from getting bail, and suggested use of tools such as electronic monitoring to ensure she stays in the country.
Gibb-Carsley argued that electronic monitoring would reduce the risk of Meng fleeing, but can’t prevent it.
Meng has two valid passports, according to Martin. Her Hong Kong passport was seized upon arrest, while her Chinese passport arrived late last night, and she is willing to surrender it along with her expired passports, Martin said.
Meng could face up to 30 years in jail for each alleged offence.
Gibb-Carsley compared Meng’s case to that of Su Bin, a Chinese businessman accused of stealing U.S. military secrets who was denied bail in a BC court in 2014, presenting the case as a precedent to also deny bail to Meng.
Meng’s bail hearing will resume on Dec. 10.
Canadian Prime Minister Trudeau told reporters on Dec. 6 that he had been informed of the arrest a few days ahead of it taking place. Trudeau said at the time that he had not been in contact with China or its ambassadors about the case, CBC reported.
The lawyers for the attorney general of Canada told the court Huawei used Hong Kong-based company, Skycom, to do business with Iran from 2009 to 2014, in violation of U.S. sanctions. Meng is accused of concealing the true nature of Huawei’s relationship and Skycom to banks in the United States. This caused the banks to indirectly breach sanctions when they cleared transactions for Huawei, Gibb-Carsley said.
In 2013 Reuters reported that Skycom had tried to sell embargoed American-made computer equipment to telecom companies in Iran. The report alleged Skycom had close links to Huawei.
At that time, several banks asked Huawei if those allegations were true, Gibb-Carsley said. Meng made a presentation to one of the banks in 2013, in which she said Huawei’s dealings with Skycom were part of its normal business operations and that it was no longer a shareholder of Skycom, he said.
However, Huawei and Skycom were effectively the same company, Gibb-Carsley said. He argued that Huawei ran Skycom as a subsidiary, adding that Skycom employees used Huawei email addresses and referred to themselves as Huawei employees.
Ties to Beijing
Meng, who also goes by the names Cathy and Sabrina, is not only Huawei’s CFO but also its deputy chair of the board of directors and its founder’s eldest daughter.
Huawei CEO and founder Ren Zhengfei is a former member of China’s People’s Liberation Army (PLA), where he worked as an engineer helping to build its communications network.
The company has been under scrutiny for its ties to the Chinese regime, raising concerns in the intelligence circles about the use of its equipment for spying for Beijing.
“[Huawei] is essentially under the control of the Chinese government,” former chief of the Canadian Security Intelligence Service Ward Elcock told CBC.
The United States, Australia, and New Zealand, all members of the Five Eyes intelligence alliance that also includes Canada and the UK, have banned Huawei from their 5G networks—the next generation in wireless technology.
In the UK, BT Group announced this month it is removing Huawei equipment from its 3G and 4G mobile operations, and will not be using Huawei technology in its 5G network.
In an interview with the Australian Financial Review, former CIA chief Michael Hayden said there is evidence that Huawei spies for Beijing.
A recent article from the newspaper The Australian says that officials in Australia have received reports about Chinese spies using Huawei to infiltrate a “foreign network.”
Under China’s National Intelligence Law, Chinese organizations have to support, assist, and cooperate with state intelligence work.
The heads of six U.S. intelligence agencies, including the CIA, FBI, and NSA, have warned against using Huawei products due to security concerns.