By The Canadian Press

Bail hearing for Huawei CFO continues for third day in Vancouver court

Dec 11, 2018 | 8:12 AM

VANCOUVER — The lawyer for a top executive at Chinese tech giant Huawei says his team worked through the night to make changes to its bail plan for Meng Wanzhou to help satisfy concerns that have been raised about her release.

David Martin said Tuesday they contacted four potential sources to offer sureties for Huawei’s chief financial officer and prepared affidavits after the judge and a federal prosecutor questioned whether Meng’s husband would be a suitable “jailer” to ensure she complies with any bail conditions.

Martin said the proposed sureties have pledged more than $3 million based on the value of their homes and $50,000 in cash from retirement savings in one case by a woman he says brought a certified cheque to court, knows the couple well and has vacationed in Alaska with Meng’s in-laws.

Martin said one person who is offering a financial guarantee is a realtor who met Meng in 2009 and sold two properties to the couple. The man has pledged his home, valued at $1.8 million, and Martin said he understands he would lose it if Meng violated release conditions.

Martin also read from the affidavit of another man who says he worked at Huawei in China in the mid-1990s and got to know Meng on a personal level. He is vouching for Meng’s character to comply with any conditions imposed by the B.C. Supreme Court and has pledged $500,000 from the equity on his Vancouver home, which is valued at $1.4 million.

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“People who have come forward with their money and their homes have confidence in Ms. Meng,” Martin told Justice William Ehrcke. 

Martin has proposed Meng’s travels be restricted to Vancouver and the surrounding area while she is being monitored both physically and electronically by two separate companies but federal prosecutor John Gibb-Carsley has suggested she be held under house arrest 24 hours a day.

Martin said the boundaries Meng is limited to under a proposed agreement with a firm that employs former police and military personnel to monitor people could work as the “functional equivalent” of house arrest.

He said Meng, 46, told him she would like to attend a business school at the University of British Columbia to get her PhD if her case “takes some time.” The judge has said extradition cases can go on for years.

“She said, ‘I’ve been working hard for 25 years and if I were to be ordered released my only simple goal is to be with my husband and my daughter. I haven’t read a novel in years. If his lordship says constrain me tighter that is fine with me.’ “

Martin told the court on Monday that Meng’s husband would pledge a total of $15 million — the value of two Vancouver homes and $1 million in cash — and would live with her to ensure she complies with the court’s conditions.

Ehrcke has suggested $3 million from the four sureties as well as $7.5 million in cash would be a suitable deposit, though Gibb-Carsley said earlier that the court should require a “significant amount of cash.”

The judge has questioned whether Meng’s husband, Liu Xiaozong, could provide a surety because he is on a six-month visitor’s visa to Canada and the form to provide the financial guarantee says it must be provided by a resident of B.C.

Meng was arrested while transferring planes in Vancouver on Dec. 1 at the request of the United States, which has 60 days to file an application for an extradition.

The U.S. wants Meng to face allegations of fraud. It says Huawei used unofficial subsidiary Skycom to do business with Iranian telecommunications companies between 2009 and 2014 in violation of sanctions. Meng has denied the allegations through her lawyer in court, promising to fight them if she is extradited to face charges in the United States.

Gibb-Carsley, who represents the attorney general of Canada, asked the judge to deny Meng’s request for bail, saying she has the financial means to flee and has no connection to Vancouver.

Martin also provided a character-reference letter from a woman who described Meng as being a “quiet, modest individual who considered her family and children a priority.”

Court has heard the visa for Liu, also referred to by his English name Carlos, is set to expire on Feb. 6, 2019. However, Martin said Liu 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 Canada, adding such applications have a 94 per cent success rate.

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

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.

The bail hearing began Friday with Gibb-Carsley outlining the allegations. According to court documents filed by the U.S. Department of Justice, Meng faces “multiple criminal charges” in the United States and each charge carries a maximum sentence of 30 years in prison, if she were convicted. 

None of the allegations have been proven in court.

Gibb-Carsley said 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 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.

The company has said it is not aware of any wrongdoing by Meng, and 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 president Barack Obama in 2010, he added.

— Follow @CamilleBains1 on Twitter.

Camille Bains, The Canadian Press