Huawei CFO faces US fraud charges linked to Iran

Chinese telecom giant Huawei's chief financial officer faces US fraud charges related to sanctions-breaking business dealings with Iran, a Canadian court heard Friday, a week after she was detained on an American extradition request.

Meng Wanzhou, 46, was arrested in Canada's Pacific coast city of Vancouver on December 1 while changing planes during a trip from Hong Kong to Mexico -- ratcheting up tensions between the United States and China just as the countries' leaders agreed to a truce in their trade war.

A day-long hearing was adjourned until Monday, when the judge is expected to render a decision on bail. Until then, she will remain in custody.

Canadian government lawyer John Gibb-Carsley asked for bail to be denied, saying Meng has been accused of "conspiracy to defraud multiple financial institutions" and if convicted faces more than 30 years in prison.

She is specifically accused of lying to a US bank, identified by her lawyer as "Hong Kong Bank," about the use of a covert subsidiary to sell to Iran in breach of sanctions.

Meng had personally denied to bankers any direct connections between Huawei and the subsidiary, SkyCom, when in fact "SkyCom is Huawei," Gibb-Carsley said, putting the bank in jeopardy of violating sanctions. SkyCom's alleged sanctions breaches occurred from 2009 to 2014, while Meng's alleged fraudulent misrepresentations were in 2013.

Meng had been a member of SkyCom's board a decade ago, but the company was later sold, said her lawyer David Martin. US authorities, however, claim Huawei continued to control the company.

China says Meng -- the daughter of Huawei founder Ren Zhengfei, a former engineer in China's People's Liberation Army -- has violated no laws in Canada or the United States and has demanded her release.

CNN, quoting an unnamed official, said the United States saw the arrest as providing leverage in US-China trade talks -- although White House trade advisor Peter Navarro has denied any link to the dialogue.