Huawei Allegedly Hid Iran Business After CFO Report

Reuters claims to have newly obtained internal Huawei documents that allegedly show the Chinese networking giant trying to cover up its relationship with Skycom Tech Co Ltd.

Skycom is a central figure in the long-running extradition of Meng Wanzhou, Huawei’s chief financial officer, to the United States.

Wanzhou had been arrested by Canadian authorities at Vancouver airport in December 2018 for alleged sanction busting with Iran and misleading banks – charges which she denies.

Internal documents

Essentially, the United States accuses both Wanzhou and Huawei of conspiring to defraud HSBC and other banks by misrepresenting Huawei’s relationship with Skycom Tech Co Ltd, an alleged front company that operated in Iran.

Huawei has always said that Skycom was a local business partner in Iran, but the US believes it was an unofficial subsidiary used to conceal Huawei’s business in Iran.

And now Reuters has reported that it has proof of the “deep links” between Skycom and Wanzhou.

It alleges that Huawei’s internal documents show how the Chinese tech titan effectively controlled Skycom.

“The documents, reported here for the first time, are part of a trove of internal Huawei and Skycom Iran-related business records – including memos, letters and contractual agreements – that Reuters has reviewed,” said the news agency.

It pointed to one document that described how Huawei scrambled in early 2013 to try to “separate” itself from Skycom out of concern over trade sanctions on Tehran.

Reuters reported that this, plus other documents, allegedly show that Huawei took a series of actions in its business dealings with the country, which at the time was subject to United Nations sanctions.

Its actions allegedly include changing the managers of Skycom, shutting down Skycom’s Tehran office, and forming another business in Iran to secure Skycom contracts worth tens of millions of dollars.

Skycom was registered in Hong Kong and was dissolved in 2017, is also a defendant in the US charges.

At one point, Huawei was a shareholder in Skycom, but according to corporate filings, sold its stake more than a decade ago.

Huawei declined to comment, Reuters reported.

Court battle

Reuters intervention comes amid the high profile extradition court case of Wanzhou in British Columbia’s Supreme Court in Vancouver.

Last week Associate Chief Justice Heather Holmes ruled that Wanzhou’s extradition to the United States can go forward.

But that court case is not the end of the matter, as her legal team are also challenging whether the Canadian police who arrested her, violated her rights.

This second hearing is currently scheduled for June. Closing arguments are expected in the last week of September and first week of October.

However, even if a Canadian court eventually recommends extradition, it is the Canadian federal justice minister who will make the final decision.

And Wanzhou has multiple chances to appeal, meaning this legal case may drag on for years.