Huawei CFO case ends with everyone looking bad

The only positive thing about this case was the release of two innocent Canadians, and yet that also confirms China as the worst kind of state.

Iain Morris, International Editor

September 27, 2021

4 Min Read
Huawei CFO case ends with everyone looking bad

Since the end of the Cold War, hostage-taking has been mainly associated with AK47-toting lunatics in the Middle East, the sort of people who chain non-combatants to radiators for several years and accidentally kill relatives at parties by letting off celebratory bursts of automatic gunfire. More recently, Belarusian strongman Alexander Lukashenko proved he belongs in their company by hijacking a Ryanair plane and imprisoning one of its passengers – a Belarusian journalist who had written some unflattering stories about his country's ruler.

Economic superpower China officially joined the hostage takers' club this month. Nearly three years ago, it rounded up two Canadian citizens working in China – Michael Kovrig and Michael Spavor – and marched them into a Chinese jail. The imprisonment of the two Michaels came shortly after Canada had detained Meng Wanzhou, the chief financial officer of Chinese telecom equipment giant Huawei, at the behest of US authorities pursuing charges of fraud. China, of course, insisted it was not retaliating and that Kovrig and Spavor were being prosecuted for spying. Their release, moments after the US dropped its extradition case against Meng, proved that was a lie.

That outcome for the Canadians is perhaps the only positive thing about the entire Meng affair, and yet it effectively confirms China as a rogue state. Nor will it reflect well on Huawei. The firm has long claimed to have no government ties, but its government stooped to kidnapping to fight Huawei's corner. That will not make any Western politician comfortable about letting Huawei through the door.

While the full details of their captivity have yet to emerge, it is safe to assume Kovrig and Spavor were not downing Singapore Slings poolside at the Mandarin Oriental. Back in 2019, they were reportedly being interrogated for up to eight hours a day and subjected to 24-hour artificial lighting. It goes without saying, but there was none of the due process taken for granted in democracies.

Detention in Vancouver was less brutal for Meng. Placed under house arrest in her multi-million-dollar property, she was free to roam most of the city, although not to leave it. In an open letter published in December 2019, she waxed lyrical about the dense forests and crimson hills she could see. The prison cell views were probably less uplifting for Kovrig and Spavor.

Politically motivated, vindictive and pointless

Flimsy as the case against Huawei's CFO may have been, it was carried out in full view of the Western media. Even documents that Canada refused to admit to court were made publicly available. The doubts those and other papers cast on the charge against Meng – that she misled HSBC bank over Huawei's relationship with Skycom, an equipment maker that sold products into Iran – may have helped to bring the case down. While the world could read every day about Meng's plight, there was only a sinister silence about the Michaels.

But nobody comes out of the affair with any credit. An extradition case that threatened to last several years looked politically motivated, vindictive and increasingly pointless. Originally, it seemed like an opening move in the campaign against Huawei, one that would eventually justify sanctions. Yet those sanctions were imposed in parallel to court proceedings, and they have been comprehensive. Denied US technologies, Huawei's smartphone business is quickly crumbling. Its networks division is being slowly throttled.

Want to know more about 5G? Check out our dedicated 5G content channel here on Light Reading.

It matters not, then, whether Skycom sold US products into Iran, a detail that could have landed HSBC in trouble with US authorities. While the operation of a front company selling products to uranium-enriching mullahs does not smack of transparency, the US has already hurt Huawei's telecom business in all the ways it can. Stopping its fast-growing cloud venture would mean leaning on other countries that still buy from Huawei. But that tactic is nothing new.

The denouement was farcical and full of contradictory but face-saving legalese. Meng's lawyers say she has agreed to deferred prosecution in 2022, but that will obviously never happen. She was allowed to return home to China after she admitted some wrongdoing, according to early reports, but her lawyers' statement makes clear "she has not pleaded guilty."

China's nationalistic and state-controlled press was jubilant in its coverage, treating Meng's homecoming as an outright US defeat without even acknowledging the existence of Kovrig and Spavor. Back in totalitarian China, Meng was on her best behavior, dutifully praising dictator Xi Jinping and thanking his minions. Even with a tracker attached to her ankle, she would have had more freedom in Canada.

Related posts:

— Iain Morris, International Editor, Light Reading

Read more about:


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).

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like