Today hasn’t been a good news day for Huawei. First, indirectly, it has been referred to in TPG’s decision to halt its mobile network rollout in Australia. US authorities have now laid charges against Huawei, its CFO, and two subsidiaries, Skycom and Huawei USA.
There are 13 charges against Huawei, Meng and two subsidiary companies. The charges, collectively, allege a scheme by Huawei to hide some of its dealings. Specifically, to hide its dealings with Iran from financial authorities and the US government.
What are the allegations against the group?
One of the named subsidiaries – Skycom – operated extensively in Iran. It is alleged that Huawei had misled authorities when it claimed it had sold its interest in Skycom.
The indictment against Meng alleges that she was a key figure in planning this scheme. It’s alleged that she gave presentations to financial partners stressing the non-association with Skycom. Huawei also gave assurances to the US government that it had no dealings in Iran. The US DOJ alleges it has evidence to the contrary.
The indictment has links all the way through to Huawei’s founder, Ren Zhengfei. It is specifically alleged that Ren lied to the FBI when he said that the company had no dealings in Iran and was fully compliant with US export restrictions.
Huawei USA is alleged to have colluded with its parent company to obstruct the investigation into the group’s alleged financial crimes by moving potential witnesses from the US to China where they would no longer be available for interview or to give evidence.
What are the consequences so far?
The publication of the indictment and details of the charges comes as the US reaches the deadline to seek Meng’s extradition from Canada, where she has remained since her arrest some weeks ago.
The longer-term impact on Huawei is unknown; Huawei’s presence in the USA is not as large there as it is elsewhere, but it does operate there, uses banking services and (importantly) acquires US technology. Depending on where this case goes, all of that could change.