VANCOUVER—Media flooded the B.C. Supreme Court in Vancouver on Friday morning as an international scandal continued to unfold: the arrest of Meng Wanzhou, chief financial officer of Chinese telecommunications giant Huawei.
A publication ban on the case was also lifted, putting an end to speculation about why Meng was arrested while transferring flights in Vancouver on Dec. 1 at the request of authorities in the United States.
Meng appeared in court for a bail hearing to determine whether she will remain in custody while the U.S. seeks her extradition from Canada. Meng, wearing a green sweater, appeared relaxed in the courtroom, even sharing a laugh with her lawyer.
A warrant from authorities in New York contains allegations that Meng knew Huawei was operating as a company called SkyCom to do business in Iran, counter to United States sanctions on the country.
Crown prosecutors said that banks expressed concern about the relationship between Huawei and SkyCom, but Meng personally told them the two companies were separate. Huawei had owned SkyCom at one point around 2008 to 2009 but divested (or sold its shares in the company) after that point. The concerns stem from a PowerPoint presentation Meng gave to Hong Kong Bank in 2013, which gave the bank reason to believe the companies were not separate entities.
Prosecutors argued Meng has no meaningful connection to Vancouver and access to “vast” resources and connections, making moot any amount of bail or surety she could provide in exchange for her freedom.
The Crown further argued Meng has shown a pattern of avoiding the United States, suggesting she suspected an investigation was taking place. Meng was arrested in Vancouver while transferring from her Hong Kong flight to one bound for Mexico, the court heard.
Meng could face up to 30 years for each charge, but the number of charges has not been revealed.
Meng’s lawyer, David Martin, argued she is not a flight risk because her family’s reputation would be damaged if she broke any conditions of a potential release, also arguing the allegations from the U.S. are not fully detailed.
“This PowerPoint is from 2013. Five years ago. If there was conspiracy … to mislead financial institutions … if Huawei and its employees were engaged in this activity, I ask rhetorically: Why has this company not been charged?” Martin said.
An affidavit prepared by Meng said she owns two homes in the Vancouver area and spends several weeks a year in the city. Martin also pointed out her daughter goes to school in the city and she has sufficient reason to stay in Vancouver.
“Ms. Meng will remain here,” Martin told the court. “She has a home, her husband is here, her daughter is at school but transferred to this place.”
Vancouver immigration lawyer Richard Kurland said the bail review will likely take weeks. The extradition hearings themselves could take years, depending on whether there are appeals, he said.
“You’ll have a burden to demonstrate you’re not a flight risk and that you’re going to comply with the process. The way it’s typically done is the person engages, at their own expense, 24-hour security, private guards that monitor them independently,” Kurland said.
“Second, you’ll also put together electronic monitoring and you need a place (to stay). So you have to have a residence where all of this is possible.”
Nelson Cunningham, a former U.S. federal prosecutor and special adviser to the Clinton administration, said he anticipated Meng will remain behind bars pending the outcome of her extradition.
“In the systems I know, someone like this would be highly likely to be in custody while their matter is being adjudicated. They’re such a flight risk, and because we know that if she leaves Canada, she’ll go to China and she’ll be beyond the reach of process,” Cunningham said.
“I would be shocked if she were released on bail.”
Meng is listed as the deputy chairwoman and chief financial officer of Huawei and is the daughter of Ren Zhengfei, the founder of the company. China’s embassy in Ottawa opposed the detention and called for Meng’s “personal freedom” to be restored.
In Ottawa, Prime Minister Justin Trudeau said he met last weekend with Chinese President Xi Jinping and within the past few weeks with Premier Li Keqiang. He downplayed any risk to China-Canada relations posed by the arrest.
“With China we always talk about human rights and the rule of law, and we always look for ways to deepen our economic participation. That will continue,” Trudeau said. “We have a very good and productive relationship.”
The Canadian Extradition Act requires that a person must be facing charges for an offence considered criminal in both Canada and the country seeking extradition.
Foreign Affairs Minister Chrystia Freeland also downplayed concerns that Meng’s extradition proceedings could be a setback or even pose a risk for Canadians in China, repeatedly stressing “this was a case where there was no political involvement.”
Like the prime minister, she said the decision to issue a provisional warrant at the request of U.S. authorities was handled “at the officials level.”
“Due process has been and will be followed in Canada,” Freeland said.
Cunningham suspected Meng’s arrest could be seen as a warning against those who defy U.S. sanctions, which cover Iran’s shipping, financial and energy sectors.
“Within the Trump administration, there are powerful cross-currents here,” he said. “Because they very much want to punish Iran by limiting trade with Iran, and by punishing companies that violate those sanctions.”
But the move could also have repercussions for Canadian-Chinese relations.
“I could imagine the Chinese government could be putting a great deal of pressure on the Canadian government,” Cunningham said.
“There’s a big disagreement right now between the U.S. and its closest allies, I believe Canada being one of them, over how to interpret what sanctions ought to be enforced against Iran and what sanctions should not.”
Huawei chief financial officer Meng Wanzhou‘s family appears to have connections to at least two pricey Vancouver homes including one in the exclusive Shaughnessy neighbourhood, property records show.
Meng, who also goes by the name Sabrina, was arrested by Canadian police while changing planes at Vancouver International Airport Dec. 1 on a warrant issued under the Extradition Act at the request of U.S. authorities.
She is due to appear in B.C. Supreme Court in Vancouver Friday morning for a continuation of her bail hearing.
Crown prosecutors have declined to say why Meng is being sought for extradition, but the Wall Street Journal has reported that it is related to alleged violations of U.S. trade sanctions, which Reuters news reported were sanctions against Iran.
The Vancouver houses, one on Matthews Ave. in Shaughnessy, the other on West 28th Avenue in Dunbar, are registered to Xiaozong Liu — according to B.C. Land Title registry records — the same name as Meng’s husband, who is identified in Chinese media.
No one answered the door when Postmedia News visited the Dunbar home Thursday afternoon, but neighbourhood residents said they recognized Meng from media reports, though they did not want to talk on the record.
The yard of the two-storey executive-style home on 28th Avenue is well kept, with decorative miniature lawn furniture out front.
Shutters were closed and drapes were drawn and a security camera monitored the front door.
Meng, 46, is deputy chairwoman of Huawei Technologies, one of China’s telecom giants and a family business founded in 1987 by her former military-engineer father Ren Zhengfei.
Chinese enterprises are often family businesses and family members take the best spots if they are qualified and interested, said Neil Abramson, a retired professor of business strategy at Simon Fraser University’s Beedie School of Business.
“She’s the daughter of the chairman so she would be like Ivanka Trump. She would be the Ivanka Trump of Huawei,” said Abramson, adding that Huawei is like the “Apple of China” and Meng is an extremely important business person.
“It would be like apprehending someone like Bill Gates or some very important American business person.”
Bloomberg News reported that Meng’s marital status was unclear, but in 2013 she denied in another media report that she was married to Huawei board member and chief strategy marketing officer Xu Wenwei.
The website Best China News references Meng appearing at a school anniversary ceremony with her husband, Xiaozong Liu.
Meng rose through the company ranks through hard work rather than privilege, said Wenran Jiang, a senior fellow at the University of British Columbia’s Institute for Asian Research.
“She was actually at one point criticized by her father and being suppressed from promotion. That was a well-known story and she eventually proved herself and moved herself up in the ranks,” he said.
Her bio on the company website says Meng joined Huawei in 1993 and held various positions across the company, including director of international accounting and CFO of Huawei Hong Kong. She holds a master’s degree from Huazhong University of Science and Technology.
For a period of time she was in charge of Huawei’s internationalization efforts, which have been extremely successful, said Jiang.
Property documents list Liu as owner of the home on 28th Avenue in Vancouver since 2009, when the home was purchased for $2.7 million. Records also show that Liu has owned the Matthews Avenue property since 2016, when it was purchased for $15 million