The investment banking company HSBC has framed Huawei CFO Meng Wanzhou by fabricating evidence for its own interests, said some legal experts, who cast doubt on the authenticity of the bank’s claims concerning key evidence in Meng’s case.
It has been almost 20 months since her arrest in Canada for alleged crimes of bank fraud, and the Supreme Court of British Columbia, Canada heard arguments on Monday based on claims of privileges over documents requested by lawyers representing Meng in her extradition case.
HSBC has emerged as a key player in the case as it submitted evidence early on that included a meeting between Meng and a senior executive from HSBC at a restaurant back in 2013.
On August 22, 2013, Meng met with Alan Thomas, HSBC’s then deputy head of global banking for the Asia Pacific region, in a restaurant in Hong Kong. During that meeting, Meng made a PowerPoint presentation about Huawei’s business links in Iran through a company called Skycom and Huawei’s efforts in compliance with U.S. sanctions.
Some five years later, that presentation became key evidence in a U.S. extradition case against her, alleging that she committed fraud against HSBC and other banks, exposing them to “both economic and reputational” risks.
“We believe she is innocent and hope she will regain her freedom as soon as possible. But as her legal case is still ongoing, I am sorry I cannot make more comments about the case itself,” said Song Liuping, Huawei’s chief legal officer and chief compliance officer.
Meng is the CFO of Huawei, not the chief legal or compliance officer. It would make sense for her to talk to HSBC, but compliance matters are not under her portfolio, and by the time the presentation was made, she had no direct relationship with Skycom.
Meng told Thomas that Skycom was a business partner of Huawei in Iran. She also explained how his business activities in that country and its trade compliance program related to U.S. sanctions. HSBC still allegedly decided to retain Huawei as a customer based on her presentation.
A year before the meeting with Meng, U.S. prosecutors had charged HSBC with four crimes, including money laundering in Mexico that involved at least 880 million U.S. dollars. The bank was fined 1.9 billion U.S. dollars and had to sign a five-year Deferred Prosecution Agreement (DPA) to self-rectify and cooperate with judicial investigations. This was the third time in a decade that HSBC had been punished for similar offenses.
“In the Anglo-Saxon legal system, there is what we call (plea)-bargaining (system). That means for HSBC certainly it realizes that it did something wrong. However, in order to reduce the responsibility, it should be held, and then it preferred to do something as a deal with the U.S. prosecutions, so that is quite possible,” said Zhu Wenqi, a professor of international law from the Renmin University of China.
U.S. prosecutors accused Meng of lying in order to attain financial services from HSBC. According to new evidence provided by Huawei, HSBC and its senior management were aware of Huawei’s business activities in Iran through Skycom, and it shows the bank had known the risks associated with servicing Skycom.
“We could see HSBC had closed the Skycom account. From this fact, we could see the bank should have known both Huawei and Skycom were their own customers. The evidence provided by HSBC also proved this point,” said Armstrong Chen, a senior partner of Dentons China.
“Meng Wanzhou is not inside a secret head had been on the board of directors of Skycom. And so there wasn’t any bad activities or bad mind on her part, because that’s a matter of public recognition, which the bank would have known about previously,” said Edward Lehman, a U.S. lawyer.
The relationship between Huawei and Meng with Skycom was outlined in the PowerPoint; however, that piece of information was left out in the summary by U.S. prosecutors provided to the Canadian courts.
HSBC’s compliance history has not been a perfect one. From 2006 to 2010, for instance, HSBC bank USA failed to implement an anti-money laundering program capable of adequately monitoring suspicious transactions and activities from HSBC Group Affiliates, particularly HSBC Mexico. As a result, at least 881 million U.S. dollars in drug trafficking proceeds were laundered through the system.
In December 2012, the U.S. Department of Justice announced enforcement actions on HSBC, and a deferred prosecution agreement was signed between the two sides. HSBC committed to improve compliance and cooperate fully with investigators. A compliance monitor was also appointed to the bank.
According to the Wall Street Journal, the monitor’s 2016 annual report to the Department of Justice found instances of potential financial crime and questioned whether HSBC was meeting all of its DPA obligations.
In late 2016, HSBC began to conduct an internal probe of Huawei.
In February 2017, U.S. Departments of Treasury, Commerce, Homeland Security and Justice, reportedly gathered in Washington D.C. to talk about how they would move forward against Huawei.
It’s reported that sometime later, HSBC helped authorities obtain evidence of links between Skycom and Huawei, which included the PowerPoint.
The PowerPoint presentation became the key piece of evidence of U.S. indictment of fraud against Meng. They alleged she made misrepresentations about the company’s links in Iran and compliance issues exposing HSBC to risks. But when submitting the PowerPoint as evidence to a Canadian court, an important part was left out, the part about Huawei’s efforts to comply with U.S. sanctions.
In an interview in June 2018, U.S. Commerce Secretary Wilbur Ross confirmed that Huawei was in compliance. However, eight months later, the U.S. made a completely different assessment and announced the U.S. charges against Huawei and Meng.
“Obviously, this came from the very top. You have the statement by Donald Trump, saying that this is a card that he intended to use in his trade negotiations,” said Einar Tangen, former U.S. prosecutor.
“Is this politically motivated? I mean, someone objective would say, might say, yes. I mean, this has been intended death path to Huawei in the United States. This is a great way to get rid of competition,” said Lehman.
“This is not a game of Go Fish, right? The idea that we are supposedly civilized, more civilized than we are today than we were in the past. How is that possible when in essence, he’s kidnapped her? All right, he is holding her for ransom against her father and the Chinese government and her own liberty for his own political gains,” said Tangen.
Source: cctvplus
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