(Adds sourcing and background)
By Karen Freifeld and Kenneth Li
Sept 24 (Reuters) - Huawei Technologies Chief
Financial Officer has reached an agreement with U.S. prosecutors
to resolve the bank fraud case against her, according to sources
familiar with the matter, in a process that should allow her to
leave Canada.
Meng is expected to appear virtually in a hearing scheduled
for later on Friday in Brooklyn federal court. She was arrested
at Vancouver International Airport in December 2018 on a U.S.
warrant, and was indicted on bank and wire fraud charges for
allegedly misleading HSBC about Huawei's business
dealings in Iran.
The deferred prosecution agreement, reported first by
Reuters, pertains only to Meng and U.S. charges against the
company remain, according to another person familiar with the
matter.
Such a resolution would remove one of several major disputes
between the world's two biggest economies. The agreement could
also potentially pave the way for the release of the two
Canadians held in China, who were arrested shortly after Meng
was taken in custody in 2018. In August, a Chinese court
sentenced Spavor to 11 years in prison for espionage.
A spokeswoman for Huawei declined to comment. A spokesman
for the U.S. Attorney's office in Brooklyn declined to comment.
An attorney for Meng could not be immediately reached for
comment. Meng has said she is innocent and has been fighting
extradition to the United States from Canada. Meng is confined
to Vancouver and monitored 24/7 by private security that she
pays for as part of her bail agreement.
Under a deferred prosecution agreement, the government
agrees to refrain from prosecuting a defendant for a period of
time, and drops the case altogether if the defendant complies
with specified conditions.
Huawei, a telecommunications equipment giant, was placed on
a U.S. trade blacklist in 2019 that restricts sales to the
company for activities contrary to U.S. national security and
foreign policy interests. The restrictions have hobbled the
company, which suffered its biggest ever revenue drop in the
first half of 2021, after the U.S. supply restrictions drove it
to sell a chunk of its once-dominant handset business and before
new growth areas have matured.
The criminal case against Meng - the daughter of Huawei
founder, Ren Zhengfei - and Huawei is cited in the blacklisting.
Huawei is charged with operating as a criminal enterprise,
stealing trade secrets and defrauding financial institutions. It
has pleaded not guilty.
Articles published by Reuters in 2012 and 2013 about Huawei,
Skycom and Meng figured prominently in the U.S. criminal case
against her. Reuters reported that Skycom had offered to sell at
least 1.3 million euros worth of embargoed Hewlett-Packard
computer equipment to Iran's largest mobile-phone operator in
2010. At least 13 pages of the proposal were marked "Huawei
confidential" and carried Huawei's logo.
Reuters also reported numerous financial and personnel links
between Huawei and Skycom, including that Meng had served on
Skycom’s board of directors between February 2008 and April
2009.
Judicial hearings in her extradition case in Vancouver
wrapped up in August, with the date for a ruling to be set on
Oct. 21.
CHINA vs USA
Huawei has become a dirty word in Washington, with a
knee-jerk reaction by China hawks in Congress to any news that
could be construed as the United States is going soft, despite
Huawei being hobbled by U.S. trade restrictions.
Trump politicized the case when he told Reuters soon after
her 2018 arrest that he would intervene if it would serve
national security or help secure a trade deal. Meng's lawyers
have said she was a pawn in the political battle between the two
super powers.
Senior U.S. officials have said that Meng's case was being
handled solely by the Justice Department and the case had no
bearing on the U.S. approach to ties with China.
During U.S. Deputy Secretary of State Wendy Sherman’s July
trip to China, Chinese Vice Foreign Minister Xie Feng insisted
that the United States drop its extradition case against Meng.
U.S. officials have acknowledged that Beijing had linked
Meng's case to the case of two detained Canadians, but insisted
that Washington would not be draw into viewing them as
bargaining chips.
(Reporting by Karen Freifeld, Kenneth Li; additional reporting
by Michael Martina ; Editing by Kirsten Donovan and Edward
Tobin)
HSBC Holdings (HSBA)
