Huawei CFO bail hearing to resume in Canada as Beijing steps up pressure

[December 10, 2018]  By Anna Mehler Paperny and Ben Blanchard

TORONTO/BEIJING (Reuters) - A top executive of Chinese tech giant Huawei Technologies is due back in a Canadian court on Monday where she'll fight for her freedom with the help of pressure from Beijing against prosecutors' claims she cannot be trusted.

Huawei [HWT.UL] Chief Financial Officer Meng Wanzhou, 46, was arrested by Canadian authorities on Dec. 1 at the request of the United States.

She faces U.S. accusations of misleading multinational banks about Huawei's control of a company operating in Iran, putting the banks at risk of violating U.S. sanctions and incurring severe penalties, court documents said. U.S. officials allege that Huawei was trying to use the banks to move money out of Iran.

Separately, Huawei appeared to suffer another setback in Japan, with the nation's top three telcos deciding not to use equipment from the firm and from ZTE Corp <0763.HK> <000063.SZ>, Kyodo News reported on Monday.

Just last week, sources told Reuters that Japan planned to ban government purchases of equipment from Huawei and ZTE to guard against intelligence leaks and cyber attacks. Similar concerns have left Huawei virtually locked out of the U.S. market and blocked its access to some others. Huawei has repeatedly insisted Beijing has no influence over it.

In Canada, prosecutors argued against giving Meng bail while she awaits extradition to the United States.

Meng said that she should be released on bail while awaiting an extradition hearing due to severe hypertension and fears for her health while incarcerated in Canada, court documents released on Sunday showed. In a sworn affidavit, Meng said she is innocent of the allegations and will contest them at trial in the United States if she is surrendered there.

She was detained while transferring flights in Canada and appeared in a British Columbia court on Friday for her bail hearing. After nearly six hours of arguments and counter arguments, the hearing was adjourned until Monday.

China has strongly criticized her detention and demanded her immediate release, threatening "consequences" for Canada if it does not. Her arrest has roiled global markets as investors worry that it could torpedo attempts to thaw trade tensions between the United States and China.

Speaking in Beijing on Monday, Chinese Foreign Ministry spokesman Lu Kang said it was "totally up to Canada" what those consequences would be if it did not "correctly handle" the situation with Meng.

Canada did not inform China "at the first instance" of her detention, despite the two having a consular agreement, and Meng has not been given proper access to medical attention, Lu added.

"This has breached her human rights," he told a daily news briefing.

China has lodged repeated complaints with Canada about the case, Lu said.

Meng Wanzhou, Executive Board Director of the Chinese technology giant Huawei, attends a session of the VTB Capital Investment Forum "Russia Calling!" in Moscow, Russia October 2, 2014. REUTERS/Alexander Bibik/File Photo

HEALTH ISSUES

Meng, the daughter of Huawei's founder, has been held in custody since her arrest. Her lawyer argues that this situation is untenable due to her health. Meng said in the sworn affidavit she was taken to a hospital for treatment for hypertension after being detained.

Meng also has sleep apnea and was treated for a carcinoma, lawyer David Martin told court on Friday.

At issue is whether Meng should be set free while her extradition case proceeds. The U.S. has 60 days to file a formal request; if its evidence convinces a judge the case has merit, Canada's justice minister will decide whether to extradite Meng.

On Monday a judge could decide to set Meng free on any number of conditions, including high-tech surveillance, or to keep her in jail, according to some legal experts.

According to local media reports, Meng is being kept in the Alouette Correctional Center for Women, a Vancouver-area jail. Reuters could not independently verify these reports.

Meng's wealth and power are undeniable as the financial chief of one of the world's biggest telecommunications hardware companies, which builds everything from networks to handsets and is seen as one of China's best chances to change the global technology landscape.

Huawei is now China's largest technology company by employees, with more than 180,000 staff and revenue of $93 billion in 2017.

The European Union's technology chief said on Friday the EU should be worried about Huawei and other Chinese technology companies because of the risk they pose to the bloc's industry and security.

China's Foreign Ministry said these worries were nonsense.

"These people have never produced evidence to prove that Huawei has affected their security," Lu said. "To date we have never heard of a country having had any security problems because they have cooperated with Huawei."

(Reporting by Anna Mehler Paperny; Additional reporting by Ben Blanchard in Beijing; Editing by Denny Thomas and Muralikumar Anantharaman)

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