A senior Chinese tech executive is linked to fraud in the US A Canadian prosecutor said he announced the first details of a case that shook financial markets and raised questions about a recent ceasefire between Beijing and Washington.
In front of a crowded courtroom in Vancouver, a Canadian public prosecutor, Meng Wanzhou, Chief Financial Officer of Huawei Technologies, is being sought by the United States for allegedly deceiving financial institutions about the relationship between Huawei and SkyCom, a company believed to be has close ties to tech giants.
They argued that Meng should be held in custody pending possible extradition to the United States, as it poses a flight risk.
The case seems to focus on the sale of US-made technology by SkyCom, based in Hong Kong, to Iran.
Meng, the daughter of Huawei's founder, Ren Zhengfei, was arrested last Saturday at an airport in Vancouver. When she went from Hong Kong to Mexico, the court heard:
The news of their arrest this week has already shaken markets by conflicting the two largest economies in the world. There are concerns that the arrest of a top Chinese executive for a trade war closed last week by President Trump and Chinese President Xi Jinping could have an impact.
The US and Canadian sides have said little about the Meng case. The Canadian Department of Justice said Meng had originally requested a ban on publication and received a ban on publication. Therefore, only a few details about her case have been published. On Friday the ban was lifted.
In China, the government demanded their immediate release. "Arresting someone without a clear reason is an obvious violation of human rights," said Geng Shuang, a spokesman for China's Foreign Ministry.
The case has focused new attention on a long-standing US effort to limit the Chinese telecommunications giant's presence in the United States and elsewhere.
Huawei, the world's second largest manufacturer of smartphones, is one of the pillars of Xi's new high-tech economy. But survival could now be questioned.
An earlier case against ZTE Corp., another Chinese telecommunications company accused of violating US export sanctions against Iran, brought it to the brink of bankruptcy last year. ZTE was originally blacklisted in the United States, but after Trump's intervention, the fine was downgraded to $ 890 million.
Although the United States has not formally brought charges against Huawei, the cases appear similar.
"China has more incentive than the US to stop the escalation," said Yanmei Xie, an analyst at Gavekal Dragonomics Consulting in Beijing. "The priority of the Chinese is to prevent the US from imposing fateful sanctions on Huawei. If the US does what they did with ZTE, China can do very little to keep Huawei from collapsing, and that's not in China's interest.
Anna Fifield in Beijing contributed to this report.