Huawei CFO attacks HSBC in new bid to dismiss U.S. extradition order

June 16, 2020, 8:48 AM UTC

Lawyers for Huawei Technologies chief financial officer Meng Wanzhou on Monday accused U.S. prosecutors of providing “grossly inaccurate” evidence in their request for the CFO’s extradition and claim that HSBC—which Meng is accused of defrauding—knew the risk it was taking all along.

The U.S. accuses Meng of defrauding HSBC into violating U.S. sanctions on Iran by failing to disclose the relationship between Huawei and Skycom—a company that operates in Iran and which the U.S. claims is an unofficial Huawei subsidiary. A key exhibit in the case is a PowerPoint presentation Meng gave to an HSBC employee in 2013.

The U.S. says Meng should have disclosed the Chinese telecom manufacturer’s connection with Skycom in that presentation but didn’t. Huawei maintains Skycom was a “business partner,” and Meng’s lawyers now argue HSBC was made aware in the PowerPoint presentation of any relevant connection.

“It will be submitted that the summary of the [PowerPoint presentation] is grossly misleading because it omitted to include reference to critical disclosures that Ms. Meng made in the PPT regarding Huawei’s ongoing business operations in Iran,” the lawyers wrote, adding that the disclosures “provided HSBC with the material facts it needed to know in order to assess whether there was any risk” in continuing to work with Huawei and Skycom.

Last month Meng, who’s under house arrest in Vancouver, lost a pivotal point in the extradition process when a judge ruled that Meng’s alleged offense constitutes a crime in both Canada and the U.S.—a key factor in executing an extradition request.

In their letter on Monday, Meng’s lawyers said HSBC’s alleged knowledge of the Huawei-Skycom connection provided a new avenue for the court to throw out the U.S. extradition request. An HSBC spokesperson told Reuters it does not comment on evidence in cases it’s not party to.

It’s not the first time Huawei has accused HSBC of misrepresenting facts regarding Skycom. In February, Huawei’s lawyers wrote to the U.S. District Court in Brooklyn—where Huawei faces separate accusations of conspiring to steal trade secrets—alleging that prosecutors had agreed to overlook HSBC’s violation of U.S. sanctions against Iran in exchange for the bank helping frame Huawei. HSBC has denied the allegations.

“HSBC agreed to cooperate with the government’s efforts to depict Huawei as the mastermind of HSBC’s sanctions violations and supply witnesses to the government’s stalled investigation of Huawei,” lawyers wrote.

HSBC’s involvement in the Meng case might expose the bank to retaliation from Beijing. Earlier this month, HSBC chairman Mark Tucker reportedly warned the U.K. government that the bank could face reprisals in China if the U.K. moved to block Huawei from the nation’s 5G telecom network.

The U.K. bank found itself further entangled in political wrangling between the U.S. and Beijing after HSBC Asia-Pacific head Peter Wong pledged support for a controversial national security law Beijing is implementing in Hong Kong. Secretary of State Mike Pompeo later said the bank had been “browbeaten” by Beijing.