Huawei arrest: Bail hearing set for Meng Wanzhou in Vancouver

A senior Chinese technical manager faces accusations of fraud in the United States in connection with Iran's commercial relations, a Canadian prosecutor said on Friday, offering the first details of a case that has battered the financial markets and raised questions about a commercial truce between Beijing and Washington.

Prior to a crowded courtroom in Vancouver, a Canadian prosecutor revealed that Meng Wanzhou, chief financial officer of Huawei Technologies, is wanted by the United States for allegedly deceptive financial institutions on the relationship between Huawei and SkyCom, a company that it is believed to have close links to the technological giant.

They claimed that Meng should be held in custody pending extradition to the United States because she is at risk of escape.

The case seems to be focused on the sales of technology produced by the United States to Iran by SkyCom, which is based in Hong Kong.

Meng, the daughter of Huawei's founder, Ren Zhengfei, was arrested at an airport in Vancouver on Saturday while she was transiting from Hong Kong to Mexico, the court heard.

The news of his arrest this week has disturbed the markets already shaken by months of conflict between the two largest economies in the world. The fear is that the arrest of a senior Chinese executive may have an impact on the truce of the trade war that hit President Trump and Chinese President Xi Jinping last week.

The US and Canadian sides have so far talked little about the Meng case. The Justice Department of Canada said that initially Meng requested and obtained a ban on publication, so few details about his case were released. On Friday, the ban was lifted.

In China, the government has demanded its immediate release. "Holding someone without giving a clear motivation is a gross violation of human rights," said Geng Shuang, a spokesman for the Chinese Foreign Ministry.

The case drew attention to a long-standing US effort to limit the presence of the Chinese telecommunications giant in the United States and elsewhere.

Huawei, the world's second largest smartphone maker, is one of the pillars of Xi's new high-tech economy. But its very survival could now be questioned.

A previous case against ZTE Corp., another Chinese telecommunications giant accused of violating US export sanctions on Iran, brought it to the brink of bankruptcy last year. ZTE was initially placed on the blacklist in the United States, but after Trump's intervention was downgraded to a fine of $ 890 million.

Although the United States has not formally announced charges against Huawei, the cases seem similar.

"China has more incentives than the United States to stop the escalation," said Yanmei Xie, an analyst at the consulting firm Gancal Dragonomics in Beijing. "The Chinese priority is to prevent the United States from launching paralyzing sanctions against Huawei, if the United States does what it did to ZTE, there is very little China that can do to stop Huawei from collapsing, and this it is not in China's interest. "

Anna Fifield in Beijing contributed to this relationship.

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