Huawei Chairmen Linked To Entity Under Investigation For Defying Iran Sanctions

Sep 16
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The United States government's criminal prosecution of Huawei Technologies' Chief Financial Officer Meng Wanzhou for allegations of skirting American laws for providing Iran with computer equipment is set to take a new turn after an investigation by Reuters revealed today that she was not the only top-level Huawei executive involved in running the company's subsidiary at the center of the allegations.

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In the American case against Ms. Meng, prosecutors have named her as the sole Huawei executive that was in control of Skycom. Reuters' investigation adds more detail to the prosecutors' argument as it reveals that she was not the only high-level official that was involved in the entire affair. The investigation also reveals that in addition to having a presence in Iran, Skycom also had a presence in Brazil and that in addition to Ms. Meng, the two high-level Huawei executives also controlled a Huawei affiliate, Hua Ying Management Co Ltd; a company based in Hong Kong and Skycom's owner. Thee details have been sourced from corporate records in Sau Paulo and in Hong Kong.

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The two executives - Ken Hu and Guo Ping - are listed as directors of Hua Ying reports Reuters. Records from Sao Paulo also reveal that Skycom was one of the two Huawei affiliates that owned Huawei Brazil and that the company gained ownership of the tech company's Brazilian arm without making any payment itself and through a transfer of shares made by two Huawei Brazil's shareholders in 2002 - both of which were also Huawei affiliates.

Mr. Guo and Mr. Hu are listed as Huawei's Deputy Chairmen and Rotating Chairmen on the company's website.

In perhaps what is the biggest reveal of today's report, Reuters also reports that Huawei continued to control Skycom even after it sold off its stake in the company to a Mauritius-based holding company Canicula Holdings Ltd. This bolsters the American prosecutorial argument which also claims that Huawei continued its control over Skykom, with the prosecutors also alleging that Huawei had in fact lent Canicula funds to buy Skycom.

Huawei is accused of doing business with the Telecommunication Company of Iran ITCI) through its affiliate Skycom offering to sell TCI equipment manufactured by Hewlett-Packard. Pictured here is the TCI headquarters in Tehran, Iran. Image: TrackPersia

Skycom was sold to the holding company in 2007, and Reuters reveals that in the next year, Ms. Meng authorized the appointments of an executive to represent both Skycom and Huawei Tech Investment Co. Ltd. – shareholders of Huawei Brazil – in the Sao Paulo company's boardroom. The publication goes on to further reveal that until 2012, when Skycom ended its ownership of Huawei Brazil, representatives of the company were individuals that were also understood to represent Huawei's interests. Skycom ended its ownership in Huawei Brazil in 2012 when it transferred its shares to a Huawei affiliate based in The Netherlands Huawei Technologies (Netherlands) BV reveal the Sao Paulo filings.

The American prosecution of Ms. Meng is a thorny diplomatic issue that has garnered widespread global attention. Amidst a trade war that has seen the U.S. government restrict Huawei's access to key semiconductors and technologies, the affair has divided political opinion in the United States and abroad.

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Huawei and Ms. Meng have denied the allegations and claimed that they did not misinform British bank HSBC about Huawei's transactions with Iran. Such transactions, which involve the flow of funds to Iran are illegal under U.S. law. American sanctions against the Chinese company come at the backdrop of a wider push by the administration to restrict Huawei's involvement in the rollout of next-generation fifth-generation (5G) cellular networks in allied countries due to fears of control and eavesdropping by the Chinese government – concerns that both Huawei and Chinese officials have dismissed.

Huawei declined Reuters' request for comment on today's report.

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