A PowerPoint presentation that Meng Wanzhou made to a HSBC banker about Huawei Technologies’ business in Iran was dishonest enough to establish a prima facie case of fraud and whether she could be sent to face trial in the US, a Canadian government lawyer told the closing stage of her extradition hearings on Wednesday.
“There was some truth, but we say not the truth, the whole truth and nothing but the truth,” said the Department of Justice lawyer Robert Frater, who is representing US interests in the case.
Frater repeatedly told Associate Chief Justice Heather Holmes in the Supreme Court of British Columbia that she could not consider the “alternative inferences” that Meng’s lawyers have suggested about evidence in the case; in a written submission, Frater and his colleagues said that only inferences supporting extradition could be considered for the purposes of a committal hearing.
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Meng’s extradition hearings draw to a close this week, more than two years and eight months after her arrest at Vancouver International Airport on a US fraud warrant on December 1, 2018, that triggered a crisis in China’s relations with both Ottawa and Washington.
Meng, the chief financial officer of Huawei and a daughter of company founder Ren Zhengfei, is accused of defrauding HSBC by lying to the bank about Huawei’s business dealings in Iran, conducted via an affiliate called Skycom, and thus putting the bank at risk of breaching American sanctions on Tehran.
The alleged deceit centres on the presentation Meng made in a Hong Kong teahouse in 2013 that was intended to allay HSBC’s concerns about the Iran dealings of Huawei and its affiliates.
Meng denies the fraud charges. Her lawyers have told the committal hearing this week that no deceit occurred, because Meng had been “crystal clear” in the presentation that Huawei was doing business in Iran, and that no fraud could have taken place because HSBC suffered no loss and no risk of loss.
But Frater told Holmes Meng’s presentation was “blatantly misleading”, as she had not disclosed the true nature of the relationship between Huawei and Skycom.
Instead of being a “third-party partner” of Huawei, as Meng’s lawyers agree she depicted Skycom, the two companies were one and the same, Frater said.
Frater said that had Meng been “forthright” with the HSBC banker, known as Witness B, she would have told him: “Both Huawei and Skycom are working in Iran and have been conducting banking transactions with you; indeed we plan to continue to do so. And you should also be aware, if you are not already, that Huawei wholly owns Skycom.”
Frater said that Meng’s lawyers had attempted the “Herculean task” of arguing that Skycom was not a subsidiary of Huawei in a legalistic sense, as if Meng and Witness B were “professors of corporate law”.
In her presentation, Meng described the companies as being in a “controllable” relationship.
“You should have no difficulty finding dishonesty sufficient to make a prima facie case of fraud,” Frater told Holmes.
In their committal submission, Frater and his colleagues reminded Holmes that the extradition hearing is not a trial and that she could only consider the evidence in a way that favours Meng being sent to the US for trial.
Meng Wanzhou leaving her Vancouver home to attend her extradition hearing in the Supreme Court of British Columbia on Wednesday. Photo: AFP alt=Meng Wanzhou leaving her Vancouver home to attend her extradition hearing in the Supreme Court of British Columbia on Wednesday. Photo: AFP
But Meng’s lawyers were trying to offer competing narratives about the nature and purpose of the PowerPoint presentation.
“As you know, it is not your role to accept alternative inferences,” Frater told Holmes.
Both sides agree that HSBC suffered no actual financial loss as a result of Meng’s statements, but the crown’s lawyers say the risks of a sanctions investigation, reputational damage, and potential losses to its loans to Huawei satisfied the element of “deprivation” necessary for a fraud charge.
Most of the extradition battle has been devoted to the Meng lawyers’ arguments that she had suffered such an “egregious” abuse of process that the entire case must be stayed. Those arguments are still being considered by Holmes.
But last week the court began the committal hearings, the final courtroom process before Holmes decides whether to release Meng – who has been under partial house arrest at one of her Vancouver homes – or recommend to Canada’s Justice Minister David Lametti that she be sent for trial in New York. The final decision on whether to surrender Meng to US authorities rests with the minister.
During the committal hearings, the crown must only establish a prima facie case of fraud – that is, that her conduct would be worthy of a trial if it had occurred in Canada.
In their written submission, the government lawyers said “committal [for trial] must follow if there are reasonable inferences available that support guilt, even if they are not the strongest or most compelling inferences that arise from the evidence”.
“It matters not whether the case is strong or weak, or even whether it is ‘unlikely to succeed at trial’. If there is an inference available on the evidence to satisfy the elements of the offence, the inference must be drawn and committal ordered,” they wrote.
Canadian case law had established that a fraud charge could cover “the entire panoply of dishonest commercial dealings”, and there was “ample evidence” in the US records of the case to justify Meng’s committal, they wrote.
Holmes could take months to issue her decision. But experts say that regardless of what she decides, appeals are likely, potentially dragging out the case for years.
The committal hearings have coincided with an escalation of diplomatic tensions. On August 11, the day committal began, a Chinese court announced that it had convicted Canadian Michael Spavor of espionage and sentenced him to 11 years jail.
Spavor and fellow Canadian Michael Kovrig were arrested in China in the days after Meng’s detention, and they were put on trial this year. No verdict has been announced in Kovrig’s case.
The Canadian government considers both arrests retaliatory and the men victims of arbitrary detention.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2021 South China Morning Post Publishers Ltd. All rights reserved.
Copyright (c) 2021. South China Morning Post Publishers Ltd. All rights reserved.