“Everything appears to be above board.” A senior HSBC employee wrote those words in an email after a meeting in August 2013 with Meng Wanzhou, the Huawei chief financial officer. The bank was weighing whether to keep Huawei as a client. Canadian government lawyers say the reassurance was built on a lie, and that lie has drawn a British bank into one of the most politically charged extradition cases in recent memory.
The meeting at the centre
Meng, whose father founded Huawei, was detained at the airport in Vancouver on 1 December 2018. Washington wants her tried on several charges, fraud among them, linked to alleged violations of American sanctions on Iran. She denies the allegations, and so does Huawei.
Everything turns on one meeting, held on 22 August 2013, between Meng and the bank. Reuters reports in the months before had raised the question of whether Skycom, a Hong Kong-based telecoms equipment seller, was just a Huawei business partner or a front used to hide its dealings in Iran. American prosecutors allege that Meng misled HSBC about the relationship, and that this exposed the bank to the risk of breaking sanctions. The arrest came over five years after that meeting.
Court documents released by Canada’s attorney general in July 2020, reported by the CBC, set out how prosecutors mean to prove it. Witnesses, among them former Huawei employees, FBI investigators and HSBC officials, will say Meng falsely assured one senior executive at HSBC that Skycom was only a local partner and that Huawei had given up its shares. Within hours Huawei announced a loan worth $1.5-billion, arranged by international banks with HSBC as principal lender. Days afterwards the executive sent the email quoted above. The documents say the evidence shows Meng “deliberately made dishonest representations to HSBC” to protect the relationship.
HSBC in the middle
By February 2021 the roles had partly reversed. Huawei went to a court in London to try to get hold of HSBC’s records, using the Bankers Book Evidence Act, hoping to undermine the US case. Meng’s lawyers are understood to be after evidence on what the bank knew of the Huawei-Skycom relationship in Iran, and how far up the bank the knowledge of the meeting travelled. They had also argued that the US left out two slides showing HSBC was not kept in the dark.
The bank’s reply was short. “This application for disclosure in the UK is without merit,” an HSBC spokesperson said. “HSBC is not a party to the underlying criminal case in the US or the extradition proceeding in Canada.”
The BBC described the case as a difficult spot for HSBC. In China the bank has faced criticism for handing information to US authorities that led to Meng’s arrest. HSBC has always said it simply gave over what the law required. At home it has been attacked by people who think it is too friendly with Beijing.
The wider dispute has not eased. Beijing’s detention of two Canadians, Michael Spavor and Michael Kovrig, is widely seen as an attempt to pressure Canada into releasing Meng. Her next appearance in a Canadian court was expected on 1 March 2021, with hearings scheduled to finish in May.
Sources
- Huawei takes HSBC to court as it tries to stop extradition (BBC)
- Federal documents say Huawei exec Meng Wanzhou lied (CBC)
- Meng Wanzhou gave HSBC false assurances (SCMP)
