Breaking News Emails

Get breaking news alerts and special reports. The news and stories that matter, delivered weekday mornings.
By David K. Li

Canadian authorities said Friday that the U.S. government believes a senior executive of a Chinese telecom giant lied about her ties to a Hong Kong company that tried to circumvent trade sanctions against Iran.

The revelation came during a bail hearing for Meng Wanzhou, chief financial officer of Huawei Technologies, who was arrested in the Vancouver airport Saturday at the behest of U.S. officials who seek her extradition to New York.

A lawyer for the Canadian Justice Department told a Vancouver judge that Meng misled banks to believe her company had no connections to Skycom Tech, which tried to sell American computer equipment to an Iranian mobile phone company — a move that violated U.S. sanctions on the sale of American goods to Iran.

Meng told U.S. banks that the two companies are separate operations, but Canadian authorities said American investigators believe Skycom works as subsidiary of Huawei.

"Ms. Meng personally represented to those banks that Skycom and Huawei were separate when it fact they were not separate," prosecutor John Gibb-Carsley said. "Skycom was Huawei."

No decision was reached Friday and the bail hearing was scheduled to resume Monday.

Meng faces up to 30 years in prison in the United States, making her an extreme flight risk, according to the Canadian government lawyer.

Defense attorney David Martin said his client would submit to electronic monitoring and that Meng wouldn't skip bail, which Martin said would bring shame to her family and country.

He pushed back against the prosecutor, who said Meng is too rich to be allowed to go free.

"The fact a person has worked hard and has extraordinary resources cannot be a factor that would exclude them from bail," Marin said.

Reuters first reported in 2012 that a Huawei partner, Skycom, offered to sell Hewlett-Packard computer equipment to an Iranian company, which would violate sanctions on the country.

Reuters later reported that Skycom records showed Meng served on the company's board between February 2008 and April 2009. Shenzhen-based Huawei is now the largest telecom equipment maker in the world.

Meng has said Huawei sold Skycom in 2009.

Appearing in a downtown Vancouver courtroom on Friday, Meng looked calm, wearing a green sweater and pants and waving at supporters in court, according to reporters on the scene.

Meng, 46, is the daughter of Huawei founder Ren Zhengfei, one of the most powerful businessmen in China. She is considered next line to run Huawei.

Her arrest has strained already-tense relations between Washington and Beijing in the wake of President Donald Trump's threats of increased tariffs on Chinese-made products headed to the U.S.

Associated Press and Reuters contributed.