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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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