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Canada Huawei executive accused of hiding connection to firm violating U.S. sanctions, B.C. court told

Huawei CFO Meng Wanzhou, who was arrested on an extradition warrant, appears at her B.C. Supreme Court bail hearing along with a translator, in Vancouver, B.C.

STRINGER/Reuters

The chief financial officer of China’s Huawei Technologies committed fraud in 2013 when she told U.S. banks that her company had no connection to a Hong Kong firm that was reportedly doing business with Iranian telecom companies in violation of U.S. sanctions, a Crown lawyer told a B.C. Supreme Court judge Friday.

Crown counsel John Gibb-Carsley said Meng Wanzhou should be extradited to the United States to face criminal proceedings there over what the U.S. alleges are Huawei’s ties to Skycom and Ms. Meng’s efforts to conceal those ties.

“Ms. Meng personally represented to those banks that Skycom and Huawei were separate when in fact they were not separate,” he said. “Skycom was Huawei.”

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Mr. Gibb-Carsley also told court that while Ms. Meng awaits extradition, she should remain in a Canadian jail because she is an extreme flight risk. He noted that her father, the founder of Huawei, has a fortune estimated at US$3.2-billion.

Ms. Meng has “access to vast resources and connections” and she could easily flee back to China if she were granted bail, he said. He also alleged that she has established a pattern of not flying through the U.S. since becoming aware of the investigations into her activities by authorities there.

She was arrested at Vancouver International Airport on Dec. 1 while awaiting a connection to Mexico.

But one of Ms. Meng’s many lawyers, David J. Martin, told the court that his client’s prominence in China, as well as her high level of personal dignity, would stop her from violating the terms of any bail.

“In addition, she would not breach a court order because to do so would humiliate and embarrass her father, whom she loves,” he said.

Mr. Martin said his client was loath to embarrass her company and its 180,000 or so employees, as well as China itself.

He said his client would wear an ankle monitor, be followed by a local security firm and put up a sizable cash surety as well as her two Vancouver homes, which are worth about $14-million.

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“Ms. Meng will remain here. She has a home, her husband is here,” he said. “Her daughter is in school but will be transferred to this place.”

The allegations are coming to light after a publication ban was lifted by the court Friday morning following a legal challenge from The Globe and Mail and other media outlets. None of the allegations, detailed in an Aug. 22 arrest warrant granted in the Eastern District of New York, has been proven in court.

Ms. Weng walked into a high-security Vancouver courtroom Friday morning upbeat and smiling, despite being clad in a green prison sweatsuit. Before the judge entered the chambers, she shook hands with Mr. Martin. She and her interpreter then sat in a bulletproof defendant’s box, where she asked for a pen and notepad.

Her arrest has drawn Canada into a global power struggle between the U.S. and China. The two countries are in the midst of a trade war and sparring over U.S. assertions that telecom giant Huawei is a national security risk and a pawn of China’s ruling Communist Party.

Canada has also been facing intense pressure from Washington to block Huawei from supplying equipment for next-generation 5G mobile networks.

Prime Minister Justin Trudeau, whose government is seeking closer economic ties with Beijing, said Thursday that Canadian Justice Department officials decided to arrest Ms. Meng at the request of U.S. law enforcement authorities. U.S. prosecutors in New York have been investigating whether Huawei violated U.S. sanctions against Iran. Huawei said Ms. Meng faces “unspecified charges in the Eastern District of New York.”

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China has angrily rebuked the Canadian government for her arrest.

“Detaining a person without providing an explanation has undoubtedly violated her human rights,” said Chinese Foreign Ministry spokesman Geng Shuang.

The Chinese embassy in Ottawa said Ms. Meng has not violated Canadian or U.S. law and has demanded her immediate release.

Her arrest came on the same day U.S. President Donald Trump and Chinese President Xi Jinping agreed to a temporary truce in their trade war at the G20 leaders’ summit in Argentina, which Mr. Trudeau also attended. U.S. national security adviser John Bolton said on Thursday that he knew of the arrest in advance.

Final approval to extradite Ms. Meng will be up to Justice Minister Jody Wilson-Raybould if the judge rules in favour of U.S. prosecutors. Ms. Meng, however, could appeal, which could delay a decision for years.

With files from Robert Fife and Steven Chase in Ottawa

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