Huawei Technologies Co. Chief Financial Officer Meng Wanzhou returned to a Canadian court to resume her long fight against extradition to the U.S., saying fraud claims linked to potential violations of American sanctions against Iran are so deeply flawed that they should be dismissed.
The U.S. accuses Meng of misleading HSBC Holding Plc and tricking the bank into processing transactions that put it at risk of violating the sanctions. At the request of U.S. officials, she was arrested by Canadian authorities in December 2018 while traveling in Vancouver.
Since then, Meng has waged a legal battle that could take years. In May, a Vancouver judge allowed the extradition case to proceed because the alleged crime in the U.S. would also be a crime in Canada. Now Meng claims the case should be tossed because the American claims include egregious errors, omissions and misrepresentations.
The U.S. has “mis-described the facts to construct a stronger case of alleged fraud than the true facts,” Scott Fenton, one of Meng’s lawyers, said Monday during the first day of hearings this week in the Supreme Court of British Columbia.
A key pillar of the U.S. case is a 2013 meeting at a Hong Kong teahouse, where Meng presented a 16-slide PowerPoint to an HSBC executive. U.S. prosecutors say she lied about Huawei’s ties with a company called Skycom Tech Co., which it describes as an unofficial subsidiary used by the Chinese tech giant to transact business in Iran.
Fenton disputed that claim, saying that U.S. authorities “cherry picked” from the presentation and provided a misleading summary of it to Canadian prosecutors. Meng was transparent about Huawei’s control of Skycom and that the two companies were business partners selling telecommunications products in Iran, he said.
Meng didn’t commit fraud because she gave HSBC all the information it needed to assess the risk of clearing U.S. dollar transactions for Skycom’s business in Iran, Fenton said.
Errors in the U.S. case cited by Meng’s defense include:
- HSBC cleared $100 million of Skycom transactions based on representations by Meng and others, but only $2 million of those transactions occurred after Meng met the HSBC banker
- While prosecutors say HSBC extended a $900 million credit line based on Meng’s assertions, her defense team says it was only an $80 million credit facility and that Huawei never drew upon it
“Huawei has confidence in Ms. Meng’s innocence and we trust in the Canadian judicial system to reach that conclusion,” Huawei said in a statement Monday.
Meng has previously argued that her arrest at Vancouver airport violated her constitutional rights and that the case against her has been politicized. Those claims will be assessed by the court in February to determine whether there was an abuse of process and if her case should be dismissed. Appeals could lengthen the process far longer with some extradition cases lasting as a long as a decade.
This week’s hearings are to determine whether her complaints about flaws in the U.S. case should also be permitted in the February hearing. Associate Chief Justice Heather Holmes is expected to issue a ruling by the end of October.