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Huawei tried to cover up its control of Iran's Skycom – Reuters

The Chinese equipment vendor tried to bury details of its relationship with Skycom, a company that sold equipment to Iran in breach of US sanctions, according to new documents unearthed by Reuters.

Iain Morris

June 3, 2020

3 Min Read
Huawei tried to cover up its control of Iran's Skycom – Reuters

Huawei was in control of Skycom, a company that sold equipment to Iran in breach of US trade sanctions, and subsequently tried to cover up details of that relationship, according to new documents unearthed by Reuters.

In a devastating blow to the Chinese equipment giant, which has long insisted Skycom was only a business partner, Reuters reports that Huawei took various steps to distance itself from Skycom, which included changing managers at the firm, shutting down its Tehran office and setting up another Iranian business to take over Skycom contracts worth tens of millions of dollars.

The latest findings are based on what Reuters describes as a "trove of Huawei and Skycom Iran-related business records," featuring company memos, letters and contracts the news organization has now reviewed.

Publication of the story comes days after a Canadian court allowed an extradition case to proceed against Meng Wanzhou, Huawei's chief financial officer, who is wanted by US authorities on charges of fraud.

Prosecutors allege she lied to a major bank about Huawei's links to Skycom, charges both she and Huawei have previously denied. Since December 2018, she has been under house arrest in Vancouver.

As Reuters reports, its latest findings seem to undermine Huawei's claims about independence from Skycom. Huawei declined to provide a comment to Reuters.

Huawei's efforts to distance itself from Skycom are said to have started in 2013, shortly after Reuters reported that Skycom had offered to sell Hewlett Packard equipment worth €1.3 million ($1.5 million) to an Iranian telecom operator in violation of US trade sanctions.

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One of the most damning internal documents, apparently recovered from Huawei's Iran office, includes the statement: "In consideration of trade compliances, A2 representative office is trying to separate Skycom and Huawei." The US indictment says A2 is Huawei's code for Iran, according to Reuters.

The full report can be accessed here.

Commenting on the report, John Strand, the CEO of Danish advisory firm Strand Consult and a long-standing Huawei critic, said the article shed further light on Huawei's activities in countries such as Iran, North Korea and Syria, in violation of international agreements.

Those activities had "earlier been proven by bank statements showing receipts from governments of these countries to Huawei," he said.

"Huawei has spent significant resources to cultivate a narrative that it is a successful company and innocent victim of an American president's war on China," said Strand. "Now Reuters comes with more evidence about Huawei's activities."

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— Iain Morris, International Editor, Light Reading

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About the Author(s)

Iain Morris

International Editor, Light Reading

Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).

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