China’s Huawei executive seeks bail in U.S. extradition case

December 11, 2018 - 8:23 AM
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Huawei CFO Meng Wanzhou
Huawei CFO Meng Wanzhou (L), who was arrested on an extradition warrant, appears with her attorney at her B.C. Supreme Court bail hearing in a drawing in Vancouver, British Columbia, Canada December 10, 2018. (REUTERS/Jane Wolsak)

VANCOUVER — A Canadian provincial court on Monday weighed whether to grant bail to a top executive of one of the world’s biggest telecommunications companies, Huawei Technologies, while she awaits a ruling on extradition to the United States.

U.S. prosecutors want Chief Financial Officer Meng Wanzhou to be extradited to face accusations she misled multinational banks about Huawei‘s control of a company operating in Iran, putting the banks at risk of violating U.S. sanctions which would incur severe penalties, court documents said.

Meng’s lawyers told the court high-tech surveillance devices would ensure their client does not flee and proposed a C$15 million ($11.3 million) bail guarantee for her release.

Meng’s arrest has roiled markets over fears it would exacerbate tensions between the United States and China, already at a high over tariffs. The two sides have agreed to trade negotiations that must be concluded by March 1.

Beijing has demanded Meng’s immediate release and threatened “consequences” for Canada. But both Chinese and U.S. officials appear to be avoiding linking her arrest to the trade dispute.

Meng, the 46-year-old daughter of the founder of Huawei, was arrested on Dec. 1 as she was changing planes in Vancouver. In a sworn affidavit, she said she is innocent and will contest the allegations against her at trial if she is surrendered to the United States.

Meng’s lawyers argue that while she awaits the extradition ruling, she should be allowed to live in one of her two multi-million-dollar Vancouver homes and travel through the area as long as she is accompanied at all times by drivers and minders from a security firm. She would also wear a global positioning system (GPS) bracelet at all times, her lawyers said.

Of the C$15 million guarantee, C$14 million would be in equity and C$1 million in cash, they said.

At one point the judge asked why Meng had avoided travel to the United States since 2017 if not to avoid arrest. Her lawyer David Martin cited a “hostile” climate toward Huawei in the United States.

“I ask the court to ask itself, what motive could she possibly have to flee?” Martin said, arguing the evidence against her was not overwhelming.

“If she were to flee, or breach order in any way … it doesn’t overstate things to say she would embarrass China itself.”

Meng appeared confident in court on Monday, smiling and taking her lawyer’s arm. She has argued she needs to be released because she has severe hypertension and fears for her health.

Huawei is the world’s largest supplier of telecommunications network equipment and second-biggest maker of smartphones, with revenue of about $92 billion last year. Unlike other big Chinese technology firms, it does much of its business overseas.

U.S. officials allege Huawei was trying to use the banks to move money out of Iran. Companies are barred from using the U.S. financial system to funnel goods and services to sanctioned entities.

Huawei and its lawyers have said the company operates in strict compliance with applicable laws, regulations and sanctions of the United States and other parties. ($1 = 1.3317 Canadian dollars) —Reporting by Anna Mehler Paperny and Julie Gordon; Additional reporting by Ben Blanchard in Beijing and David Ljunggren in Ottawa; Writing by Anna Mehler Paperny and Nick Zieminski Editing by Bill Rigby and Sonya Hepinstall