Huawei allegedly hid its Iran subsidiary, Skycom Tech fearing United States sanctions
The United States President has always been saying that Huawei has links to banned Iranian firm Skycom Tech. In fact, the links to Skycom Tech have a direct bearing on the arrest of Meng Wanzhou, the ex-Huawei CFO and daughter of Huawei’s founder.
Wanzhou was arrested by Canadian authorities at Vancouver airport in December 2018 for violating the United States sanctions on Iran and misleading banks – charges which she denies. Her case for extradition to the United States for facing sentencing is pending in a Canadian court. On May 27, Canada’s British Columbia’s Supreme Court ruled that the fraud charges against Wanzhou meet the key Canadian extradition standard, almost bringing curtains for her.
The United States has all along been saying that both Wanzhou and Huawei had conspired to defraud HSBC and other banks by misrepresenting Huawei’s relationship with Skycom Tech Co Ltd, an alleged Huawei subsidiary that operated in Iran. Huawei and Chinese diplomats had maintained that Skycom was a local business partner of Huawei in Iran. The case rested on the US proving that Skycom Tech was indeed a subsidiary of Huawei and it beat the US sanctions by exporting banned equipment to Iran.
The entire case began when in 2013, Reuters reported deep links between the firm and the telecom-equipment giant’s chief financial officer, Wanzhou. Now, Reuters has new proof that Skycom is indeed the subsidiary of Huawei. The new evidence in Huawei’s internal documents shows 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.
Reuters says that Huawei scrambled in early 2013 to hid its links with Skycom in an effort to beat the U.S. sanctions with the active collaboration of CFO, Wanzhou.
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 tried changing the managers of Skycom, shutting down Skycom’s Tehran office, and forming another business in Iran to secure Skycom contracts worth tens of millions of dollars in order to hoodwink the UN and US sanctions against Iran. At one point, Huawei was the only shareholder in Skycom, but according to corporate filings, it sold its stake more than a decade ago.
The United States has filed a case against Wanzhou and made Skycom a defendant in the case. With the Canadian proceeding for Wanzhou’s extradition to the U.S. nearing completion, it seems that the U.S. has an iron-clad case against her and Huawei.
Huawei had declined to comment on the incident.