Huawei, CFO hit with criminal charges in US

The US Department of Justice has charged Huawei, as well as its current CFO and former director of the Chinese vendor’s Australian operators Meng Wanzhou, as part of the long investigation into the company’s alleged violation of US sanctions on Iran.

Huawei, two affiliates and Wanzhou have been charged with 13 counts including bank fraud, wire fraud, conspiracy to defraud the United States and theft of trade secrets.

Acting US Attorney General Richard P Donoghue has accused Huawei of “employ[ing] a strategy of lies and deceit to conduct and grow its business” spanning over a decade.

Huawei has been accused of a scheme involving lying about the company’s business activities in Iran by falsely claiming that it no longer controlled its affiliate in the nation Skycom.

A purported sale of the subsidiary in 2007 was conducted only to make it appear that Huawei had only limited operations in Iran, the indictment alleges. Huawei made false representations to this effect to both US banks and the US government, it further claims.

Having control of business activities in Iran would have prohibited US banks from providing banking service to the vendor related to its Iran transactions. But Huawei has been accused of wilfully conducting transactions worth millions of dollars that were in direct violation of the sanctions.

Meng Wanzhou established Huawei’s Australian subsidiary in 2005 and was a director of Huawei Australia between October 2005 and August 2011, but there is no mention of any malfeasance in Australia in the indictment.

Huawei has denied having committed any violations of US law set out in the indictment, and stated that it is not aware of any wrongdoing by Meng.

“Huawei is disappointed to learn of the charges brought against the company today. After Ms. Meng’s arrest, the Company sought an opportunity to discuss the Eastern District of New York investigation with the Justice Department, but the request was rejected without explanation,” the company said in a statement.

“The allegations in the Western District of Washington trade secret indictment were already the subject of a civil suit that was settled by the parties after a Seattle jury found neither damages nor willful and malicious conduct on the trade secret claim.”

The charges, which were unsealed on Monday, come in the wake of the increasingly bitter trade war between China and the US, where telecom equipment has become a key battleground. The US government has been accused of taking measures, such as these charges and the ban on the supply of Huawei equipment to US agencies, that are secretly aimed at halting China’s rapid ascent in the telecoms equipment market.

But other countries have been following the US government’s lead in implementing various restrictions on Huawei supplying equipment to their market. In August last year, the Australian Government banned Huawei and other Chinese vendors from supplying equipment for the nation’s 5G rollouts.

This decision recently forced TPG Telecom to cease the deployment of its planned mobile network despite having already spent over $100 million on it to date, because the principal supplier for the mostly small cell-based network was to be Huawei.

Image credit: ©stock.adobe.com/au/pashabo

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