Huawei CFO charged with hiding connection to Skycom, which worked with Iran

The bail hearing for Huawei CFO Meng Wanzhou has revealed she is charged with concealing ties between her company and another that violated US trade sanctions.

Meng was arrested last week in Canada and had her bail hearing at the end of the week. In it, according to multiple reports, she committed fraud when she told US banks in 2013 that Huawei had no connection to Hong Kong firm Skycom, which was apparently doing business with Iranian telecoms companies. The suggestion is that Skycom was used to disguise Huawei’s own violations of US trade sanctions, which is what caused ZTE so much grief earlier this year.

“Ms. Meng personally represented to those banks that Skycom and Huawei were separate when in fact they were not separate,” said Crown Counsel John Gibb-Carsley. “Skycom was Huawei.” Evidence for this is reportedly contained in a PowerPoint presentation from that time and it looks like this manoeuvre may be what was referred to in ZTE’s F7 memo.

In a bid to get bail Meng’s lawyers that she’s not a flight risk because she wouldn’t want to embarrass her father, the founder of Huawei, as well as the company itself and the whole country. She also apparently has a couple of houses in Vancouver, which she could stay in. Counter-arguments have focused on how much cash she has, meaning she could afford to leg it.

The original scoop on Skycom seems to have come from Reuters, which reported back in January 2013: ‘Huawei CFO linked to firm that offered HP gear to Iran’. The reason this case has escalated to an arrest isn’t the business Huawei may or may not have done with Iranian companies, but the allegations of deliberately misleading US banks – hence committing fraud.