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New documents link Huawei to suspected front companies in Iran, Syria

LONDON/HONG KONG (Reuters) — The U.S. case against the chief financial officer of China’s Huawei Technologies, who was arrested in Canada last month, centers on the company’s suspected ties to two obscure companies. One is a telecom equipment seller that operated in Tehran; the other is that firm’s owner, a holding company registered in Mauritius.

U.S. authorities allege CFO Meng Wanzhou deceived international banks into clearing transactions with Iran by claiming the two companies were independent of Huawei, when in fact Huawei controlled them. Huawei has maintained the two are independent: equipment seller Skycom Tech Co. Ltd. and shell company Canicula Holdings Ltd.

Meng Wanzhou

But corporate filings and other documents found by Reuters in Iran and Syria show that Huawei, the world’s largest supplier of telecommunications network equipment, is more closely linked to both firms than previously known.

The documents reveal that a high-level Huawei executive appears to have been appointed Skycom’s Iran manager. They also show that at least three Chinese-named individuals had signing rights for both Huawei and Skycom bank accounts in Iran. Reuters also discovered that a Middle Eastern lawyer said Huawei conducted operations in Syria through Canicula.

The previously unreported ties between Huawei and the two companies could bear on the U.S. case against Meng, who is the daughter of Huawei founder Ren Zhengfei, by further undermining Huawei’s claims that Skycom was merely an arms-length business partner.

Huawei, U.S. authorities assert, retained control of Skycom, using it to sell telecom equipment to Iran and move money out via the international banking system. As a result of the deception, U.S. authorities say, banks unwittingly cleared hundreds of millions of dollars of transactions that potentially violated economic sanctions Washington had in place at the time against doing business with Iran.

Meng did not respond to a request for comment by Reuters, and Huawei declined to answer questions for this story. Canicula’s offices could not be reached. A Justice Department spokesman in Washington declined to comment.

Meng was released on C$10 million ($7.5 million) bail on Dec. 11 and remains in Vancouver while Washington tries to extradite her. In the United States, Meng would face charges in connection with an alleged conspiracy to defraud multiple financial institutions, with a maximum sentence of 30 years for each charge. The exact charges have not been made public.