Bank fraud charge against Meng Wanzhou is bogus, lawyers argue in new court filing

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Lawyers for Meng Wanzhou, the Huawei executive who has been fighting extradition to the United States for more than two years, argue in a new court filing that the bank fraud charge upon which the warrant rests is bogus.

The U.S. wants Canada to hand over Ms. Meng because, it alleges, she lied to HSBC about Huawei’s business operations in Iran and put the financial institution at risk of violating U.S. sanctions.

The Chinese businesswoman’s defence team, however, says she couldn’t have committed bank fraud because HSBC was never at risk of losing money over what she said to its executives.

The judge presiding over the case, Associate Chief Justice Heather Holmes of the B.C. Supreme Court, has already said that the Attorney-General of Canada, which is arguing for extradition, must demonstrate that HSBC was at real risk of damage, or deprivation, and that this “cannot be merely theoretical.”

Ms. Meng’s lawyers, however, say the U.S. government has misled Canada in the record of the case it has provided to back up the arrest warrant.

They say the U.S. is arguing that HSBC’s loans to Huawei could have been put in jeopardy if the Chinese tech company wound up facing prosecution for violating U.S. sanctions. They include a US$1.5-billion loan and a “credit facility” of between US$700-million and US$900-million.

Her lawyers point out that none of those loans were arranged with the parent company but rather with subsidiaries. And the parent company was not on the hook for repaying them because it was not a guarantor.

They also note that all the loans in question had been repaid by July, 2017, more than 17 months before Ms. Meng’s arrest at Vancouver International Airport in December, 2018. And, they note, the credit facility was never drawn upon.

This filing is the latest in a series of efforts by Ms. Meng’s Canadian legal team to discredit the U.S. case against her.

Much of the case concerns a presentation she made to staff of HSBC, a British bank, in a Hong Kong tea house in 2013. It’s there, the U.S. alleges, that she lied about Huawei’s control over a subsidiary, Skycom, that was doing business in Iran.

Ms. Meng’s arrest damaged Canada-China relations significantly. Shortly afterward, Chinese authorities detained two Canadians on what Prime Minister Justin Trudeau has called manufactured charges. Michael Kovrig and Michael Spavor have been imprisoned ever since.

Justice Holmes has already ruled to admit evidence brought forward by Ms. Meng’s legal team that shows the U.S. government failed to provide Canada with a complete record of her presentation to HSBC.

The U.S. has alleged that, during her tea house presentation, she misled HSBC by denying that Skycom was a subsidiary of Huawei and by making it seem that Huawei had divested itself of shares and control of the company.

Ms. Meng’s team has demonstrated that the U.S. failed to include key parts of her 2013 presentation, including a segment where she said, “Huawei’s engagement with Skycom is normal and controllable business co-operation and this will not change in the future.”

Her lawyers have also succeeded in persuading Justice Holmes to admit evidence that contradicts the U.S. government’s assertion that HSBC was misled by the Huawei executive. The U.S. government’s record of the case against her says only “junior” HSBC employees knew about the relationship between Huawei and Skycom and did not report this to senior staff.

But Ms. Meng’s lawyers have produced e-mails they say demonstrate that senior HSBC staff knew of the true relationship between Huawei and Skycom. They include two executives with the titles “vice-president, global banking” and “senior vice-president, global payment.”

With files from Reuters.

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