Huawei CFO Charged With Conspiracy to Defraud Banks

Huawei CFO Meng Wanzhou was charged with conspiracy to defraud banks and should not be granted bail because she may flee, a lawyer representing Canada said during a court hearing, according to Bloomberg.

The U.S. alleges that Huawei used a firm called Skycom to do business with Iran, breaching sanctions, and that Meng hid ties between Huawei and Skycom, according to Crown attorney John Gibb-Carsley. Canada was presenting the case against Meng on behalf of the U.S., which wants to extradite her.

The Crown attorney argued against granting Meng bail because she’s so wealthy that she will easily be able to pay whatever is required and then flee. Banking institutions were induced into transactions that violated sanction laws and exposed them to risk of fines, he also said. The attorney didn’t name the banks.

Meng’s defense lawyer David Martin said the evidence presented doesn’t prove she broke either U.S. or Canadian law. U.S. sanctions law is very complex, has changed over time, and there are exemptions for telecom equipment in the country’s Iran sanctions, Martin argued.

The case has roiled markets already hammered by months of rising trade tension between the world’s two largest economies. The move has especially enraged China, which called for her release. While the U.S. routinely asks allies to extradite drug lords, arms dealers and other criminals, detaining a major Chinese executive in this manner is unusual.

The hearing in Vancouver is the start of a long legal process in Canada that could end with Meng being sent to the U.S. to stand trial. Even though the North American neighbors have a longstanding treaty governing extradition, it can take months, even years, for a defendant to be handed over, if at all. Should a judge agree to extradite Meng, she would have multiple chances to appeal the decision.