Huawei executive Meng Wanzhou headed home from Vancouver on Saturday as two Canadians were released from prison in China under a three-way deal to end the bitter dispute that has undermined US-China and Canada ties for nearly three years.
Meng and the Canadians – former diplomat Michael Kovrig and businessman Michael Spavor – were on their way home after US prosecutors agreed to suspend and eventually drop fraud charges laid against Meng, the 49-year-old daughter of Ren Zhengfei, the wealthy founder of telecoms giant Huawei.
Meng appeared virtually in a Brooklyn federal court on Friday (Sept 24) to accept a deferred prosecution agreement that reportedly required her to admit some wrongdoing – in a statement of facts on the case – in exchange for US prosecutors deferring and later dropping bank and wire fraud charges against her.
Washington had accused Meng of fraud against HSBC bank and wire fraud, saying she tried to hide violations of US sanctions on Iran by Huawei affiliate Skycom.
But on Friday, US prosecutors agreed to defer the charges until 2022 and them drop them if Meng abides by the terms of the agreement.
Later, Meng, who had been living under house arrest since late 2018, got on a flight bound for Shenzhen after a Vancouver court, where she had been fighting extradition to the United States, ended the hearing and allowed her to leave.
Meng’s arrest was enmeshed in a broader campaign against Huawei, a private firm that Washington says is closely tied to the Chinese government and People’s Liberation Army.
US officials say Huawei’s phones, routers and switching equipment, used widely around the world, offer Chinese intelligence a potent backdoor into global communications. Huawei denies that it has ties to the Chinese military.
‘TRUMPED UP CHARGES’
The two Canadians, who were arrested shortly after Meng, were caught in the midst of what critics called “hostage diplomacy”. Ottawa has contended they were set up on “trumped up” charges of espionage.
Beijing, meanwhile, hailed the arrest of Meng as “a purely political incident” and part of the Trump Administration’s attack on its standout technology titan. It accused Ottawa of doing its neighbour’s bidding, but denied that the charges laid against the “two Michaels” were related to Meng’s case.
Resolution of the case removes a deep thorn in the relationship between Beijing, Washington and Ottawa. It had become a “serious irritant” in US-Canada ties, and the release of Meng “does open up slightly more space for the US and China to engage, particularly at the presidential level, and manage tail risks in the relationship,” Eurasia Group said in a note on Saturday.
“However, it is unlikely to signal any broader improvement on issues where competition is deepest: tech rivalry, trade, and geopolitics. Among the myriad complex issues in the broader relationship that are under strain are US-China financial linkages.
“This week, US regulators moved ahead with steps that will result in the eventual delisting of Chinese companies from US exchanges — potentially as soon as 2023 — unless the two sides can resolve their long-running dispute over audits,” the Group said. It rated the chance of a resolution on audits of US-listed Chinese companies as “a 30% probability”.
Unlike the two Canadians held in Chinese custody, Meng was under loose house arrest in Vancouver. Under her bail terms, she was been permitted to roam the city during the day and return at night to her house in Shaughnessy, an upscale neighborhood in the Pacific coastal city. She was monitored 24/7 by private security, which she paid for as part of her bail deal.
Her husband, Liu Xiaozong, and the son and daughter they have together have been able to visit her during the pandemic. She passed the time with oil painting, reading and work, according to an open letter to Huawei employees she wrote on the first anniversary of her arrest.
According to Huawei’s website, Meng joined the company in 1993, obtained a master’s degree from Huazhong University of Science and Technology in 1998, and rose through the ranks over the years, mostly in financial roles.
She has held the positions of director of the international accounting department, CFO of Huawei Hong Kong, and president of the accounting management department, according to the website.
Speaking to reporters before heading back, she said: “Over the past three years, my life has been turned upside down. It was a disruptive time for me as a mother, wife and a company executive.”
Xinhua state news agency carried a one-paragraph report on the news, saying Meng was returning on a charter flight organised by Beijing to reunite with her family “through unremitting efforts of the Chinese government.”
She later posted a message on Chinese social media from her plane saying “thank you to the party and government.”
Later on Saturday, Huawei said it would ‘defend itself’ against legal claims that it flouted US sanctions.
“Huawei will continue to defend itself against the allegations in the US District Court for the Eastern District of New York,” the company said in a statement as Meng flew back.
• Jim Pollard with AFP and Reuters.
This reported was updated on Sept 25.