Prosecutors claim Meng Wanzhou’s defense wants an extradition judge to overstep her ‘limited role’ by looking at issues more appropriate for trial.
VANCOUVER, British Columbia (CN) — Huawei executive Meng Wanzhou’s defense team touted “concrete evidence” that the company’s control over an Iranian subsidiary accused of violating U.S. sanctions was “open knowledge” among various HSBC bank employees — and therefore cannot amount to fraud as U.S. prosecutors claim.
In B.C. Supreme Court Monday, Meng’s lawyer Frank Addario urged Associate Chief Justice Heather Holmes to admit evidence that purportedly shows the record and supplementary records of the case against Meng are misleading and unreliable.
Taking the court through email chains and affidavits, Addario told Holmes that the U.S. case against his client misleadingly underplayed what an HSBC risk manager, known as Witness B, knew about the Chinese tech giant’s control over Skycom, the Iranian subsidiary alleged to have broken U.S. sanctions on Iran. Addario told the court that it was no “secret” that Huawei had control over the bank accounts of a company known as Canicula Holdings Ltd., which purchased Skycom in November 2007.
Addario said it was “manifestly unreliable and misleading to advance an allegation” that HSBC thought Skycom had been sold to a third-party when the bank’s risk manager knew Canicula was a “closely held” non-arms-length affiliate whose bank accounts were controlled by Huawei. Moreover, Addario said there were multiple points of contact between company and bank, showing HSBC knew of Huawei’s control over Canicula, and by extension Skycom
Emails show that from 2010 to 2014, both Skycom and Canicula were “consistently identified as Huawei accounts” with the bank, Addario said. Given that timeline, Addario told Holmes a Reuters articles in late 2012 and early 2013 — the “catalyst” for HSBC’s concerns over Skycom’s Iranian dealings — caused the bank to have a “preoccupation” with Skycom. That preoccupation spurred the now-infamous meeting in a Hong Kong tearoom in August 2013 where according to U.S. prosecutors, Meng gave a PowerPoint presentation to an HSBC bank executive that misrepresented Huawei’s dealings in Iran through Skycom.
However, the bank’s risk committee allowed the relationship to continue upon the condition of reviewing the share purchase agreement between Canicula and Skycom. After that review, knowledge of Huawei’s continued affiliation and control over the companies, Addario said, “could not have come out of the blue for bank executives” as the record and supplementary records of the case would “have you believe.
Addario said that tn addition, among Huawei’s nearly 200 accounts with the bank, Canicula was listed among the company’s Middle East accounts in the United Arab Emirates. He disputed the inference that Meng distanced herself and Huawei from the sale of Skycom by misrepresenting the relationship between Skycom, Huawei and Canicula.
“The evidence we’re asking you to admit allows us to rebut this inference,” he told Holmes. “There’s too much correspondence going back and forth between these two entities. HSBC Witness B would have to be living in a complete silo to not to know about the true relationship Huawei, Canicula and Skycom.”
Canadian prosecutor Robert Frater, however, told Holmes that Meng’s defense team was trying to shoehorn inappropriate evidence in the proceeding by focusing on the “minutia” rather than the overall simplicity of the case. Doing so would cause Holmes to overstep her limited role as an extradition judge, he said.
“Extradition is a serious matter between states,” Frater said. “Extradition is not going to be denied for trivial purposes, or trivial reasons rather.”
Frater claimed the defense team’s submissions were more appropriate in the context of a trial rather than an extradition hearing. He called it an improper attempt to admit a “collection of cherry-picked emails” to put to witnesses to somehow show widespread knowledge among HSBC employees of the true relationship between Huawei, Skycom and Canicula.
“All of what my friend put to you today, in my respectful submission, is in pursuit of an invitation to you to go beyond the limited functions of an extradition judge,” Frater told Holmes. “It’s quite a simple case from the requesting state’s point of view. Reuters published some newspaper articles that suggested that Huawei had dealings with Skycom and that those dealings, if HSBC continued to deal with Huawei, may make HSBC offside U.S. sanctions law.”
Frater said that prompted Meng to request a meeting with HSBC to “convince” bank representatives that Huawei and Skycom were arms-length business partners.
“The statements that were made in that meeting were an attempt to distance Huawei from Skycom,” he said. “There is no suggestion in anything that she said that, in breaking the relationship with Skycom, that Huawei had sold the shares to Canicula, who they also controlled. Fraudulent misrepresentation can exist in what is not said as it can in what is said.”
The hearings continue Wednesday and are scheduled to last through mid-May.