CFO Meng loses bail hearing as Huawei prepares for months of struggle
Huawei CFO Meng Wanzhou has lost an appeal to a Canadian court to have her bail conditions relaxed.
The court in Vancouver decided on Friday that she must continue to have security guards, which she pays for, with her at all times when she leaves her house.
“It costs her several hundred thousand dollars a month,” a source familiar with the matter told Capacity, speaking on condition of anonymity. “Bail was granted before Covid. Now the guards travel with her in her car.”
According to Reuters, William Ehrcke, a justice in the British Columbia Supreme Court, dismissed her request, stating that “the current bail conditions are the minimum required to mitigate Ms Meng’s risk of flight to an acceptable level”.
Meng, who is daughter of Huawei’s founder Ren Zhengfei, has continued to work remotely as the company’s CFO since her arrest at Vancouver airport at the start of December 2018. She has members of her finance team with her in the Vancouver house, we were told.
The US wants the Canadians to extradite her to face charges for allegedly misleading HSBC about Huawei’s business dealings in Iran, causing the bank to violate US sanctions.
She denies these charges, Capacity’s sources say, and her legal team has said that HSBC was aware of the existence of Skycom, a company of which Meng was a director that was used to transfer products to Iran.
Meng and her team are preparing themselves for a long legal battle, even after Friday’s decision on her bail conditions. Reuters reported at the weekend that she will next appear in court on 1 March for the last stage of her extradition hearings, which are due to finish in May.
But Capacity’s sources within the company are expecting the case to extend from May-June through to December — three years after her arrest — followed by appeals from whichever side loses in court. “Even if she loses in 2021 the appeals will go on years,” Capacity was told.
One issue is whether the US is legally able to impose “extraterritorial terms”, Capacity was told: Huawei is Chinese, Skycom is based in Hong Kong, HSBC is a British bank and the case involves allegedly selling telecoms kit to Iran. “Why are they using the criminal justice system to nab executives of non-American companies?”
One option is that there is a settlement, suggested Capacity’s sources, pointing out that this could relate to one of a number of relationships — the US and China; Canada and China; Canada and the US; the US and Meng; and the US and Huawei.
Capacity has been told that US president Joe Biden’s transition team was in touch with the team of Canadian prime minister Justin Trudeau before the 20 January presidential inauguration. “Canada is suffering consequences for doing something the US wanted,” said one source. “Canada wants the US to settle with China. But there is no straightforward pathway.”
One source in Canada said grimly: “I don’t expect anything to happen for the next five months. This case will create some damaging precedents for US-Canada relations. I don’t think anyone in the US cares about what we do with Meng Wanzhou.”