Hundreds of pages of documents provided to Meng Wanzhou by HSBC bank should be rejected from her Canadian extradition hearing because the potential evidence is irrelevant to the proceeding, a government lawyer said on Wednesday.
Earlier, Meng’s team continued their attack on the record of the case that US prosecutors submitted to the hearing; they say the HSBC documents show that the case record is selective, misleading, “manifestly unreliable” and “outright false”.
But Robert Frater, the top lawyer in the Canadian Department of Justice – which is representing US interests in Meng’s marathon extradition battle – told the Supreme Court of British Columbia in Vancouver that the issue was not whether the documents were reliable.
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“The issue here is relevance [to an extradition hearing] … relevance in this context means capable of showing that the evidence of the requesting state is manifestly unreliable,” Frater told Associate Chief Justice Heather Holmes.
It was not, and the potential evidence was instead a matter for trial, he said.
Frater said there was a high threshold and a rigorous test for admissibility of evidence at an extradition hearing. “It’s not enough to say that alternative inferences could be drawn,” he said.
Lying to your banker to get more credit is fraud
Canadian government lawyer Robert Frater
Meng is accused by the US of defrauding HSBC by lying about Huawei’s business dealings in Iran, via affiliated companies, which could have put the bank at risk of breaching US sanctions. But her lawyers say that the trove of documents provided by the purported victim fatally undermine the case by showing that the US misled the Canadian court, and that Meng should be freed as a result.
They said the record of the case summarised HSBC emails to depict a schism between junior bank staff who were aware of the connections between Huawei and its affiliates, Skycom and Canicula, and senior executives who were not. But the actual email chains told a different story, Meng’s lawyers said, with top HSBC staff knowing about the connections, and thus no fraud that hinged on them being deceived could have taken place.
“The Requesting State’s case for fraud is based on the improbable theory that a global bank relied on a single line in a PowerPoint or a single PowerPoint presentation to make a business decision about one of its biggest customers,” Meng’s lawyers said in a written submission, referring to the allegedly deceptive presentation she made to a HSBC banker in a Hong Kong teahouse in 2013, upon which the US case is based.
“The new evidence shows HSBC to be the sophisticated institution it is, acting with full knowledge of Huawei’s affiliates and their corporate history.”
Meng, who is Huawei’s chief financial officer and the daughter of company founder Ren Zhengfei, is applying to admit more than 300 pages of HSBC documents to the hearing. They were given to her by HSBC as a result of a settlement with the bank that was struck in Hong Kong in April.
Frater said the argument of Meng’s lawyers about the evidence was “simply that everyone [at HSBC] knew” about Huawei’s connection to Skycom.
But the witness who met Meng in the teahouse, and who briefed HSBC’s risk committee about Huawei and Skycom, would testify that he did not know, said Frater.
“Undermining credibility is not the purpose of this exercise,” he said. “That is why we have trials.”
He continued: “Witness B says he did not know. My friends [Meng’s lawyers] want to say that not only did he know, but everyone else knew … if they want to challenge him on that point, they have to do it at trial.”
Meng’s lawyers had presented a case that HSBC staff “could have put it together like a desk from Ikea”, Frater said, referring to Huawei’s connections to Skycom and Canicula. But “there’s no evidence here that someone connected the dots”, he added.
Holmes pressed Frater on this point, suggesting that “the connection is obvious … it’s certainly surprising that the [HSBC] relationship manager was unaware [that these] two entities, Skycom and Canicula, were on his Huawei list”.
“He should have known,” Frater said, prompting Holmes to say it approached a conclusion that “he did know”.
Earlier, Meng’s lawyer Mark Sandler had focused on a portion of the PowerPoint presentation that he said Witness B had failed to communicate to the risk committee. That portion of the presentation had called Skycom “a controllable entity”, Sandler said.
But Holmes took issue with that depiction, pointing out that the exact wording in Meng’s presentation said “Huawei’s engagement with Skycom is normal and controllable business cooperation”; this arguably implied something different to calling Skycom a “controllable entity”, she said.
In a written submission, the Canadian government lawyers said Meng’s use of the word “controllable” did not change the context of the teahouse presentation, which was to assuage HSBC’s fears of sanctions risk.
“The relevant (and misleading) message for HSBC from the Applicant’s PowerPoint presentation was that Skycom and Huawei were separate,” it said.
Frater told the court that depicting Meng as having been honest about Skycom was inconsistent with other portions of her PowerPoint presentation, which said “Huawei subsidiaries in sensitive countries will not open accounts at HSBC”, and described Skycom not as a Huawei entity but as Huawei’s “partner” or a “third party”.
“Lying to your banker to get more credit is fraud,” said Frater.
He concluded by warning that the extradition case was now “so far down in the weeds … that it ought to give your ladyship pause”.
In response, Sandler said it required “no inferential leap” by HSBC for it to know that Huawei controlled Canicula and Skycom, because Huawei had shut down their bank accounts.
“There’s no getting around the fact you can’t shut down accounts you don’t control,” he said.
Holmes said she would deliver her ruling on whether to admit the HSBC documents as evidence on July 9, and adjourned the hearing until then.
The HSBC documents threw the schedule for the extradition fight into disarray, prompting a three-month delay while Meng’s lawyers assessed the documents. Hearings are now expected to continue until August, with Holmes then considering her ruling, but appeals could drag the matter out for years.
People cannot be extradited from Canada if they are accused of an action that would not constitute a crime if committed there. While breaching US sanctions is not a crime in Canada, Meng has been accused of the extraditable offence of fraud.
She has been fighting extradition since she was arrested at Vancouver’s airport on December 1, 2018. Two Canadians, Michael Spavor and Michael Kovrig, were arrested in China soon afterwards and have undergone trials for espionage. The outcomes of the brief trials are not known; Canada regards their detention as arbitrary and retaliatory.
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