Meng Wanzhou, the chief financial officer of Chinese tech giant Huawei and the daughter of its founder Ren Zhengfei, was detained in Canada late last year at the behest of U.S. authorities, who allege she oversaw a complex financial scam to violate nuclear sanctions on Iran. The incident has become a major source of tension amid the ongoing U.S.-China trade war—and according to a Tuesday report in Reuters, newly discovered corporate filings and other documents show the depth of Huawei’s ties to Iran as well as Syria.
U.S. authorities claim that Meng lied to international banking institutions about Huawei’s ties to Skycom, a Hong Kong-based company that did business with Iranian telecoms, and a Mauritius-based shell company that bought Skycom from a Huawei subsidiary in 2007, Canicula Holdings Ltd. While Meng has insisted that Huawei cut ties to Skycom in 2009, U.S. authorities believe that Huawei had total control over Skycom (and that it was staffed mainly by Huawei employees) as well as Canicula.
Reuters wrote that U.S. investigators believe the purpose of doing so was to trick international banks into clearing “hundreds of millions of dollars of transactions” that may have violated sanctions on Iran, including attempted sales of embargoed HP gear.
Documents obtained by Reuters seem to show yet more suspicious overlap between Huawei and Skycom, as well as evidence Huawei used Canicula as a front in Syria. Reuters wrote:
… Skycom records filed in Hong Kong, where the company was registered, show that its shares were transferred in November 2007 to Canicula. Canicula, which was registered in Mauritius in 2006, continued to hold Skycom shares for about a decade, Skycom records show.
… [Documents] reveal that a high-level Huawei executive appears to have been appointed Skycom’s Iran manager. They also show that at least three Chinese-named individuals had signing rights for both Huawei and Skycom bank accounts in Iran. Reuters also discovered that a Middle Eastern lawyer said Huawei conducted operations in Syria through Canicula.
Furthermore, corporate records filed by Skycom in Iran in 2011 stated that an individual by the name of Shi Yaohong had managed its business for two years, Reuters wrote. An Emirates News Agency press release identified him as a Huawei official in 2010, while a LinkedIn account matching that name identified the holder as Huawei’s “President Middle East Region” in 2012. Reuters added:
Shi, now president of Huawei’s software business unit, hung up the phone when Reuters asked him about his relationship with Skycom.
Determining exactly who controlled Canicula from publicly available records had been difficult because Mauritius is “an offshore haven similar to the British Virgin Islands,” the Wall Street Journal wrote in December 2018. However, the paper noted that Meng became a director of Skycom for over a year after Huawei’s shares in it had been transferred to Canicula.
More evidence linking Canicula to Huawei is present in the Reuters report.
After a Middle Eastern business news website, http://Aliqtisadi.com, “published a brief article about the dissolution of a Huawei company in Syria that specialised in automated teller machine (ATM) equipment” in 2014, Reuters wrote, it received a letter from attorney Osama Karawani (an appointed liquidator in the sale) asking for a correction. In that letter, Karawani said that the article inaccurately implied Huawei itself had disbanded, rather than the subsidiary.
“Huawei was never dissolved,” he wrote. Instead, the company “has been and is still operating in Syria through several companies which are Huawei Technologies Ltd and Canicula Holdings Ltd.”
Other sources told Reuters that U.S. investigators are aware that Huawei is linked to Canicula and that the latter had an office in Damascus.
Skycom liquidated in June 2017, Reuters concluded, while Canicula announced without explanation or named attribution months later that it had ceased operations in Syria.
Whether or not Canada will ultimately extradite Meng to the U.S.—where more evidence may come to light as to who really controlled Skycom and Canicula—will have to be determined through an extensive legal battle. The Huawei executive won a $US7.5 ($10) million bail ruling in December 2018, though she was ordered to surrender passports, submit to a nightly curfew, pay for a 24/7 security detail at her home in Vancouver, and wear a GPS ankle monitor.