LONDON/SAO PAULO (Reuters): An obscure Hong Kong-registered company stands at the center of the U.S. criminal case against China's Huawei Technologies and its chief financial officer.
U.S. authorities allege the giant telecom-gear maker used the firm to skirt American economic sanctions on Iran between 2007 and 2014. Huawei has said it sold the business in 2007 and denies any wrongdoing.
Now, Reuters has uncovered previously unreported links in Brazil between Huawei and the company, Skycom Tech Co Ltd, that could offer support to the U.S. case against the tech giant and Meng Wanzhou, its chief financial officer and daughter of its founder. Corporate records filed with the state of Sao Paulo in Brazil show that Huawei and Skycom were closely intertwined there for five years after Huawei disposed of its shares in Skycom in 2007.
Until late 2007, two other top-level Huawei executives also had close ties with Skycom, corporate records filed in Brazil and Hong Kong show. Both men - Ken Hu and Guo Ping - currently are deputy chairmen of Huawei and serve on a rotating basis as the company's chairman. Guo now has the chairman's role.
The criminal case is part of a multifaceted, global campaign by Washington to check the power of Huawei, a front in America's broadening cold war with China. The United States has been lobbying allies to avoid using Huawei equipment in their next-generation mobile telecommunications systems, known as 5G. Washington argues China could use the technology to attack critical infrastructure and compromise intelligence sharing. Huawei and China have strenuously denied this.
Huawei's relationship with Skycom is central to the high-profile U.S. criminal case. A U.S. indictment alleges Huawei controlled Skycom and used it to violate American sanctions by obtaining embargoed U.S. computer gear in Iran. Huawei and Meng have maintained that while Huawei once owned Skycom, the firm later became in effect an arms-length business partner. In a recent court filing related to the case, however, Meng's lawyers acknowledged that Huawei "exercised a level of control over Skycom."
The information newly uncovered by Reuters buttresses the U.S. case by establishing that Huawei's control over Skycom was even stronger than American prosecutors have asserted. Corporate records show that two additional Huawei executives ran a company that owned Skycom - not just Meng, the sole executive named by prosecutors. Records also show that Huawei's control of Skycom extended to Brazil, not only Iran, and lasted through the period of the alleged sanctions violations, long after the Chinese tech giant claims it sold its 100% stake.
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