Huawei hid business operation in Iran
China’s Huawei Technologies acted to cover up its
relationship with a firm that had tried to sell prohibited U.S. computer gear
to Iran, after Reuters in 2013 reported deep links between the firm and the
telecom-equipment giant’s chief financial officer, newly obtained internal
Huawei documents show.
Huawei has long described the firm - Skycom Tech Co Ltd - as
a separate local business partner in Iran. Now, documents obtained by Reuters
show how the Chinese tech titan effectively controlled Skycom. The documents,
reported here for the first time, are part of a trove of internal Huawei and
Skycom Iran-related business records - including memos, letters and contractual
agreements - that Reuters has reviewed.
One document described how Huawei scrambled in early 2013 to
try to “separate” itself from Skycom out of concern over trade sanctions on
Tehran. To that end, this and other documents show, Huawei took a series of
actions - including changing the managers of Skycom, shutting down Skycom’s
Tehran office and forming another business in Iran to take over tens of
millions of dollars worth of Skycom contracts.
The revelations in the new documents could buttress a
high-profile criminal case being pursued by U.S. authorities against Huawei and
its chief financial officer, Meng Wanzhou, who is also the daughter of Huawei’s
founder. The United States has been trying to get Meng extradited from Canada,
where she was arrested in December 2018. A Canadian judge last week allowed the
case to continue, rejecting defense arguments that the U.S. charges against
Meng do not constitute crimes in Canada.
A U.S. indictment alleges that Huawei and Meng participated
in a fraudulent scheme to obtain prohibited U.S. goods and technology for
Huawei’s Iran-based business via Skycom, and move money out of Iran by
deceiving a major bank. The indictment alleges that Skycom was an “unofficial
subsidiary” of Huawei, not a local partner.
Huawei and Meng have denied the criminal charges, which
include bank fraud, wire fraud and other allegations. Skycom, which was
registered in Hong Kong and was dissolved in 2017, is also a defendant. At one
point, Huawei was a shareholder in Skycom but, according to corporate filings,
sold its stake more than a decade ago.
The newly obtained documents appear to undermine Huawei’s
claims that Skycom was just a business partner. They offer a behind-the-scenes
look at some of what transpired at the two companies inside Iran seven years
ago and how intertwined the companies were. The documents are variously written
in English, Chinese and Farsi.
Huawei declined to comment for this story.
China’s foreign ministry said the United States was
politicizing economic and trade issues, which is not in the interest of Chinese
or American firms. “We urge the United States to immediately stop its
unreasonable suppression of Chinese firms including Huawei,” it said. It
referred specific questions about this story to Huawei.
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