Judge grants $10M bail for Huawei executive facing possible extradition to U.S.

Meng Wanzhou, 46, is facing possible extradition to the United States on allegations she misled financial institutions about business Huawei did with Iranian telecommunications companies in violation of international sanctions. Meng has denied the allegations through her lawyer in court, promising to fight them if she is extradited. (File Photo: Huawei/Website)

VANCOUVER — A top executive at Chinese tech giant Huawei has been released on $10 million bail and must agree to wear an electronic tracking device while she is also monitored by two employees of a company that provides surveillance using former police and military personnel.

Meng Wanzhou, 46, is facing possible extradition to the United States on allegations she misled financial institutions about business Huawei did with Iranian telecommunications companies in violation of international sanctions. Meng has denied the allegations through her lawyer in court, promising to fight them if she is extradited.

Justice William Ehrcke of the Supreme Court of British Columbia said Tuesday he is satisfied Meng, a well-educated businesswomen with letters of reference, does not pose a flight risk and her detention is not required to ensure she attends court.

He placed 16 conditions on her release, including that she remain at her home in Vancouver between 11 p.m. and 6 a.m. unless she gets prior written permission from her bail supervisor or from the court or for medical reasons, and that she surrender her two passports and any travel documents.

Meng must also agree to pay the cost of services provided by the both the company that provides the physical surveillance and the one that tracks her movements with an electronic ankle bracelet.

Ehrcke set bail at $10 million, with $7.5 million of it in cash from Meng and her husband. The rest of her bail is covered by four sureties, including three people who put up their homes as a deposit and a fourth who brought a $50,000 certified cheque to court and joined the others in saying Meng would not damage her reputation by breaching conditions set by the court.

Meng’s supporters packed the courtroom for a third day Tuesday and burst into applause when the judge agreed to release Huawei’s chief financial officer.

Federal prosecutor John Gibb-Carsley, representing the attorney general of Canada, had argued Meng has an incentive to flee due to the potentially lengthy prison term she would face if she were extradited and convicted in the United States. He said she also has significant financial resources to escape to China, which does not have an extradition agreement with the U.S.

The case has created tensions between Canada and China, which has warned of consequences for Meng’s arrest.

A sometime Canadian diplomat has been detained in China and Prime Minister Justin Trudeau said Tuesday the federal government is seeking answers about the unexplained case of Michael Kovrig, an international-affairs analyst. So far, it’s unclear whether there is any link between the two cases.

Meng’s arrest also caused fallout on world stock markets but the U.S. and China have tried to keep the case separate from their wider trade dispute and suggested Tuesday that talks to resolve their differences may resume.

On Tuesday, President Donald Trump undercut efforts to distinguish between trade talks and the Huawei case. In an interview with Reuters, he said he would consider intervening in the Justice Department’s case against Meng if it would be in the interest of U.S. national security or help forge a trade deal with Beijing.

Huawei was founded by Meng’s father, Ren Zhengfei. The company has projected 2018 sales of more than US$102 billion and has overtaken Apple in smartphone sales.

Meng was arrested Dec. 1 at Vancouver International Airport on a warrant that alleges she committed fraud related to Huawei using unofficial subsidiary Skycom to do business with Iranian telecommunications companies between 2009 and 2014.

According to court documents filed by the U.S. Department of Justice, Meng faces “multiple criminal charges” and each charge carries a maximum sentence of 30 years in prison, if she were convicted.

None of the allegations has been proven in court.

Gibb-Carsley told the court Meng is alleged to have said Huawei and Skycom were separate companies in a meeting with an executive of a financial institution, misleading the executive and putting the institution at risk of financial harm and criminal liability.

Gibb-Carsley said Reuters reported in 2013 that Huawei was operating Skycom and had attempted to import U.S.-manufactured computer equipment into Iran allegedly in violation of sanctions. The story caused concern among banks that did international business with Huawei, he said.

Executives, including Meng, then made a series of misrepresentations about the relationship between the two companies to the banks, inducing them to carry out transactions linked to Iran they otherwise would not have completed and which violated sanction laws, he alleged.

Huawei has said it is not aware of any wrongdoing by Meng and her lawyer, David Martin, said no charge or indictment has been filed against his client, just a warrant.

Martin said Meng’s 2013 presentation to an executive at HSBC was prepared by numerous employees at Huawei. The presentation did assert that Huawei operates in Iran in strict compliance with applicable laws and sanctions, he said.

Huawei sold its shares in Skycom before the sanctions became law in the United States under former president Barack Obama in 2010, he added.

After Meng’s release on Tuesday, Huawei released a statement saying it has “every confidence that the Canadian and U.S. legal systems will reach a just conclusion.”

“As we have stressed all along, Huawei complies with all applicable laws and regulations in the countries and regions where we operate, including export control and sanction laws of the UN, U.S., and E.U.”

To support Meng’s bail application, Martin found a number of friends and associates to vouch for his client’s character and to offer financial guarantees that she will not flee.

Additional sureties were needed after Ehrcke questioned whether her husband, Liu Xiaozong, could sign a guarantee. Court heard Liu is living in Vancouver on a six-month visitors visa and Ehrcke said the form to provide a financial guarantee must be provided by a resident of B.C.

Martin said although Liu’s visa is set to expire in February, he has come and gone from Canada over the last 15 years, has a record of compliance and could apply for an extension to stay in the country.

“He’s a rich capitalist, he can do his functions anywhere he is,” Martin said.

Ehrcke said Meng is being held on a provisional warrant and the United States has 60 days to make an extradition request. She has been ordered to appear in court on Feb. 6 to fix a date for further proceedings.

— With files from The Associated Press.