Sat, Jan 12, 2019 - Page 9 News List

Documents link Huawei to suspected front companies in Iran and Syria

Names and letters from lawyers seem to contradict denials from the Chinese company

By Steve Stecklow, Babak Dehghanpisheh and James Pomfret  /  Reuters, LONDON and HONG KONG

Illustration: Lance Liu

The US case against the chief financial officer of China’s Huawei Technologies (華為), who was arrested in Canada last month, centers on the company’s suspected ties to two obscure companies. One is a telecom equipment seller that operated in Tehran; the other is that firm’s owner, a holding company registered in Mauritius.

US authorities allege that Meng Wanzhou (孟晚舟) deceived international banks into clearing transactions with Iran by claiming that the two companies were independent of Huawei, when in fact Huawei controlled them.

Huawei has maintained that the two are independent: equipment seller Skycom Tech Co Ltd (星通技術) and shell company Canicula Holdings Ltd.

However, corporate filings and other documents found in Iran and Syria show that Huawei, the world’s largest supplier of telecommunications network equipment, is more closely linked to both firms than previously known.

The documents reveal that a high-level Huawei executive appears to have been appointed Skycom’s Iran manager. They also show that at least three Chinese-named individuals had signing rights for both Huawei and Skycom bank accounts in Iran.

Reporters also discovered that a Middle Eastern lawyer said that Huawei conducted operations in Syria through Canicula.

The previously unreported ties between Huawei and the two companies could bear on the US case against Meng, who is the daughter of Huawei founder Ren Zhengfei (任正非), by further undermining Huawei’s claims that Skycom was merely an arms-length business partner.

Huawei, US authorities assert, retained control of Skycom, using it to sell telecom equipment to Iran and move money out via the international banking system.

As a result of the deception, US authorities say, banks unwittingly cleared hundreds of millions of dollars of transactions that potentially violated economic sanctions Washington had in place at the time against doing business with Iran.

Meng did not respond to a request for comment and Huawei declined to answer questions for this story.

Canicula’s offices could not be reached.

A US Department of Justice spokesman in Washington declined to comment.

Meng was released on C$10 million (US$7.5 million) bail on Dec. 11 and remains in Vancouver while Washington tries to extradite her.

In the US, Meng would face charges in connection with an alleged conspiracy to defraud multiple financial institutions, with a maximum sentence of 30 years for each charge. The exact charges have not been made public.

Huawei last month said it has been given little information about the US allegations “and is not aware of any wrongdoing by Ms Meng.”

The company has described its relationship with Skycom as “a normal business partnership.”

It has said it has fully complied with all laws and regulations, and required Skycom to do the same.

Meng’s arrest on a US warrant has caused an uproar in China. It came at a time of growing trade and military tensions between Washington and Beijing, and amid worries by US intelligence that Huawei’s telecommunications equipment could contain “backdoors” for Chinese espionage.

The firm has repeatedly denied such claims.

Nevertheless, New Zealand and Australia recently banned Huawei from building their next generation of mobile phone networks, and British authorities have also expressed concerns.

Articles published by Reuters in 2012 and 2013 about Huawei, Skycom and Meng figure prominently in the US case against her.

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