VANCOUVER, British Columbia (CN) --- In the second day of hearings into an application to introduce a dump of documents handed over by the bank in Hong Kong about HSBC’s knowledge of the company’s relationship with an Iranian subsidiary that may have violated U.S. sanctions, Canadian government lawyers didn’t contest their reliability, but rather their relevance to the extradition case of Huawei CFO Meng Whanzou.
“Relevance, unlike reliability, is a comparatively more rigorous test,” Robert Frater, a lawyer for the Canadian government acting on behalf of the United States, told the court.
Meng is accused of lying to an HSBC executive at a 2013 meeting in Hong Kong, where she gave a PowerPoint presentation that described the subsidiary Skycom as “controllable” by Huawei, a term the judge overseeing the proceedings acknowledged is “ambiguous.” The new evidence she seeks to admit includes email chains and internal reports produced by the bank about perceived risk of continuing to do business with Huawei, which kept more than 100 accounts at HSBC, including accounts it controlled for both Skycom and Canicula, accounts that were later closed by Huawei.
On Tuesday, Meng’s lawyers argued the new evidence shows the U.S. case against their client is “manifestly unreliable,” due to widespread knowledge among HSBC employees that Huawei controlled Skycom, as well as Canicula, the company that eventually acquired it. Meng’s lawyers attacked the U.S. records of the case, claiming new evidence shows that certain paragraphs used against their client were “patently false” and therefore unreliable enough to deny her extradition to New York to face fraud charges. But the Canadian government’s team claimed Wednesday that the new evidence shows quite the opposite.
“In large measure, the evidence presented on this application simply confirms the requesting state’s evidence that [Meng] failed to communicate the true nature of the relationship between Huawei and companies it controlled,” the Attorney General of Canada’s written submission states. “The proposed evidence is incapable of demonstrating that any part of the various records of the case are unreliable.”
The misrepresentation of Huawei’s control of Skycom lies at the heart of the U.S. fraud case against the Chinese telecom executive. She’s accused of providing false assurances to an HSBC representative, dubbed Witness B, about whether Huawei had exposed the bank to potential sanctions violations due to Skycom’s dealings in the sanctioned Islamic republic. That witness, Frater said, is set to testify that he didn’t know Huawei controlled Skycom since Meng allegedly distanced the company from Huawei by falsely describing it as a “third-party business partner.”
“Their evidence cannot refute Witness B’s evidence,” Frater told the court. “If they want to challenge him on that point, they have to do it at trial.”
Moreover, Frater said that even if some bank employees knew of Huawei’s dominance over both Skycom or Canicula, that doesn’t mean fraud didn’t occur --- refuting Meng’s lawyers claims that both senior and junior HSBC employees knew.
“Fraud exists even if some people knew, that’s what the law says,” Frater argued. “There’s a distancing of Skycom and Huawei and the idea that everyone knew is not reflected in the paper they want you to look at.”
This month, Meng had sought to keep the new proposed evidence under seal, but Associate Chief Justice Heather Holmes denied the request though her reasons only became public Wednesday morning. Releasing the proposed new evidence, a dump of documents handed over to Huawei by HSBC in relation to a Hong Kong court action, was contingent on an agreement to seek to keep them confidential in Canada, though the deal contemplated that Canadian law wouldn’t support such a ban.
“Given the high public interest in the case as a whole, the potential centrality of the documents suggests that banning publication of their contents would have heavy negative effects on freedom of expression," Holmes wrote. "There is a strong interest in the public being informed of the contents in order to understand the positions of the parties and the reasons for the court’s decisions."
Frater argued that accusations by Meng’s lawyers that the U.S. records of the case contain outright falsehoods, stopping short of calling them “bald-faced lies,” were unwarranted and contradicted by the very material they’re seeking to admit.
“Rather than presenting clear and cogent evidence that refutes the allegations of the requesting state, the HSBC Hong Kong materials bolsters the allegations in the [records of the case] that [Meng] deceived HSBC about the true nature of the relationship between Huawei and Skycom,” the attorney general’s written submission states.
“We are so far down in the weeds of this case that it ought to give your ladyship pause,” Frater told Holmes before concluding the day’s submissions. “This is the sort of discussion that ought to be had at trial, about what inferences could be drawn from who knew what at what time and what information was shared, that’s why we have trials. That is not the function of this court.”
But Holmes disagreed.
“I’m not speaking so much about evidence, but rather the theory of the case as disclosed in the [records of the case] that are frankly a little difficult to wrestle with on certain points,” Holmes said. “I would simply invite you to consider that that may be, in part, an explanation for being as far down in the weeds as we appear to be.”
After a brief exchange, though, Frater told the judge the case remains simple at its essence.
“There are a variety of issues to canvas on committal, I don’t deny that, but the heart of the case is pretty easy,” Frater said. “Lying to your banker to get more credit is fraud.”
Holmes left it up in the air as to when she would rule on the latest application to admit the new evidence, scheduling a case management conference for July 9. The home stretch of Meng’s marathon extradition case is set to begin Aug. 3.
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