A Vancouver judge set a $10 million CAD bail ($7.5 million U.S.) for Huawei Chief Financial Officer Meng Wanzhou Tuesday, capping a week of increasing trade tensions and strong market reactionsaround the dispute between the Department of Justice and one of China’s largest hardware companies.
The United States had asked the Vancouver court to deny bail for Meng, whose father is a billionaire and a founder of Huawei, calling her a flight risk. Canada has been expected to extradite Meng to the United States over charges that the company improperly took payments from Iran in violation of sanctions against the country.
Meng’s next moves will be closely watched, but it is likely with her corporate and family connections that she will be able to make bail. The $10 million CAD includes $7 million CAD cash and $3 million CAD more from five or more guarantors, presented by Meng and her attorney’s as sureties that she would remain in the country.
As conditions of the bail agreement, Meng must surrender her passports, wear a GPS tracking device and be accompanied by security detail whenever she leaves her residence.
“We have every confidence that the Canadian and U.S. legal systems will reach a just conclusion in the following proceedings,” Huawei said in a statement following the bail hearing. “As we have stressed all along, Huawei complies with all applicable laws and regulations in the countries and regions where we operate, including export control and sanction laws of the UN, U.S. and EU.”
The U.S. is alleging Huawei used a small third-party tech provider based in Hong Kong called Skycom to conduct business with Iranian companies despite sanctions against doing so by the E.U. and U.S.
Meng is due back in court on Feb. 6.
Growing anxiety for U.S., Canadian executives in China
Also Tuesday, a former Canadian diplomat to China named Michael Kovrig was reportedly taken into custody in China without explanation, according to the Canadian Broadcasting Corporation.
Canadian Prime Minister Justin Trudeau, Kovrig’s employer International Crisis Group and Global Affairs Canada — the country’s diplomatic organization — have said they are working to engage with Chinese diplomats on Kovrig’s arrest, and that because of Canadian privacy laws, further details weren’t immediately available.
China has threatened “serious consequences” over the arrest, and a Monday op-ed in China’s Global Times Communist Party newspaper, said Meng’s detention was “inhumane.” Meng reportedly was treated at a Vancouver hospital for hypertension following her arrest, a factor in her attorney’s arguments for granting bail.
The arrest is flaring tensions between China and the U.S. as the two countries try to work out a trade deal. Huawei is one of China’s biggest companies, and U.S. officials have been accusing the hardware giant — which recently surpassed Apple in number of mobile phones shipped — of a wide range of sanctions violations and cybercrimes for the better part of a decade.
—CNBC’s Laura Batchelor contributed to this report.
