Huawei CFO, US reach agreement to resolve bank fraud charges

Sept. 24 (Reuters) – Huawei chief financial officer Meng Wanzhou reached a deal with U.S. prosecutors to end the bank fraud case against her, U.S. Deputy Prosecutor David Kessler told a judge on Friday. New York, a decision that should allow him to leave. Canada and relieve a point of tension between China and the United States.

A hearing is underway in federal court in Brooklyn, where the U.S. government has said it will discuss a resolution to the charges against Meng, according to a court record filed Friday. Meng is attending the hearing virtually from Canada and has pleaded not guilty to the charges.

Meng was arrested at Vancouver International Airport in December 2018 under a US warrant and charged with bank and wire fraud for allegedly misleading HSBC (HSBA.L) into the equipment giant’s business dealings. telecommunications in Iran, a story first reported by Reuters in 2012.

Reuters was the first to report on Friday that the United States had reached a deferred prosecution agreement with Meng. The deal only concerns Meng and US charges remain against the company, according to two other people familiar with the matter.

Kessler said the deal ends in December 2022 and that as long as she doesn’t break the law, the charges will be dropped.

Beyond resolving a dispute between the United States and China, the deal could also pave the way for the release of two Canadians, businessman Michael Spavor and former diplomat Michael Kovrig, who have been detained in China since their arrest shortly after Meng’s arrest. in 2018. In August, a Chinese court sentenced Spavor to 11 years in prison for espionage.

A Huawei spokeswoman declined to comment. An attorney for Meng could not immediately be reached for comment.

Meng, who also used the English first names “Cathy” and “Sabrina”, said she was innocent and fought against extradition from Canada to the United States. She is confined to Vancouver and monitored 24/7 by private security that she pays as part of her bail deal.

“HUAWEI CONFIDENTIAL”

Articles published by Reuters in 2012 and 2013 about Huawei, Hong Kong-registered company Skycom and Meng featured prominently in the US criminal case against her. Reuters reported that Skycom had offered to sell at least 1.3 million euros of embargoed Hewlett-Packard IT equipment to Iran’s largest mobile operator in 2010. At least 13 pages of the proposal were marked ” Huawei Confidential ”and bore the Huawei logo.

Reuters also reported numerous financial and personal ties between Huawei and Skycom, including that Meng served on Skycom’s board between February 2008 and April 2009.

Huawei (HWT.UL) was placed on a U.S. commerce blacklist in 2019 which restricts sales to the company for activities contrary to national security and U.S. foreign policy interests. The restrictions hampered the company, which suffered its biggest drop in revenue in the first half of 2021, after U.S. supply restrictions pushed it to sell off some of its once-dominant handset business and before new ones. areas of growth have matured.

The criminal case against Meng – the daughter of Huawei founder Ren Zhengfei – and Huawei is blacklisted. Huawei is accused of operating as a criminal enterprise, stealing trade secrets and defrauding financial institutions. He pleaded not guilty.

Court hearings in his Vancouver extradition case ended in August, with the date of the ruling due to be set for October 21.

A Canadian government official said Ottawa will not comment until the US court proceedings are completed. Kovrig’s wife declined to comment. No one representing Spavor could be reached immediately for comment.

CHINA VS UNITED STATES

Huawei has become a dirty word in Washington, with Chinese hawks in Congress reacting instinctively to any news that could be interpreted as the US decline, despite Huawei being hampered by US trade restrictions.

Then-President Donald Trump politicized the case when he told Reuters shortly after his arrest in 2018 that he would step in if it served national security or helped secure a trade deal. Meng’s lawyers said she was a pawn in the political battle between the two superpowers.

Senior US officials have said Meng’s case is being handled only by the Justice Department and that the case has no bearing on the US approach to relations with China.

During US Deputy Secretary of State Wendy Sherman’s July trip to China, Chinese Vice Foreign Minister Xie Feng insisted the United States drop its extradition case against Meng.

U.S. officials acknowledged that Beijing linked Meng’s case to the case of the two detained Canadians, but insisted Washington would not be made to view them as bargaining chips.

Reporting by Karen Freifeld, Kenneth Li, Jon Stempel and Michael Martina; edited by Chris Sanders and Edward Tobin

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