China detains ex-Canadian diplomat as Huawei CFO fights bail battle

Huawei Technologies. [PHOTO CREDIT: The Sun Nigeria]
Huawei Technologies. [PHOTO CREDIT: The Sun Nigeria]

A former Canadian diplomat has been detained in China, two sources said on Tuesday, just hours before a top executive at Chinese telecoms giant Huawei Technologies is set to return to a Vancouver courtroom for a bail hearing.

The bail hearing has angered Beijing and the detention of the Canadian was believed to be part of China’s desire to deal squarely with the scenario.

It was not immediately clear if the cases were related, but Canadian analysts had already predicted China would retaliate after the arrest of Huawei CFO, Meng Wanzhou, at the request of U.S. authorities.

The former diplomat is Michael Kovrig, who is based in China and works for the International Crisis Group, which said it was seeking his prompt and safe release.

Canadian foreign ministry officials said they were not immediately able to confirm that Mr Kovrig was in detention.

China has threatened severe consequences unless Canada releases Ms Wanzhou immediately.

Canadian Prime Minister, Justin Trudeau, says the matter is one for the courts to decide.

Tuesday will be the third day of bail hearings in a British Columbia court, where a judge will weigh final issues in determining whether Ms Wanzhou should be freed on bail while awaiting extradition proceedings.

Ms Wanzhou, 46, faces U.S. accusations that she misled multinational banks about Huawei’s control of a company operating in Iran.

Her actions reportedly put the banks at risk of violating U.S. sanctions, incurring severe penalties, court documents said.

The judge on Monday rolled the proceedings over to Tuesday because he wanted to hear more from both sides about the issue of surety – who will take responsibility for Ms Wanzhou’s actions if she were released.

Ms Wanzhou’s lawyer, David Martin, had offered her husband as surety.

But the judge and the public prosecutor questioned whether Liu Xiaozong, Ms Wanzhou’s husband, could perform this duty as he is not a resident of British Columbia and would not suffer if she were to breach her bail conditions.

Intent on getting Ms Wanzhou out of detention and into one of her two luxury homes in the city, defence lawyer, Martin, is offering up high-tech surveillance devices and a 24-hour security detail to ensure his client does not flee.

He has also proposed a C$15 million ($11.3 million) bail guarantee and pledged Ms Wanzhou would hand over all her passports and travel documents to Canadian police, the court heard.

The arrest has affected markets over fears it will exacerbate tensions between the U.S. and China in trade negotiations that both sides have agreed must be concluded by March 1.

Speaking at a forum in Beijing on Tuesday, the Chinese government’s top diplomat, state councillor Wang Yi, said the government kept constant watch on the safety of Chinese citizens abroad, though did not directly mention Wanzhou’s case.

“For any bullying that wantonly violates the legitimate rights and interests of Chinese citizens, China will never sit idly by,” state television quoted him as saying.

Huawei is the world’s largest supplier of telecommunications network equipment and second-biggest maker of smartphones, with revenue of about $92 billion last year.

Unlike other big Chinese technology firms, it does much of its business overseas.

U.S. officials allege the telecom giant was trying to use multinational banks to move money out of Iran.

Companies are barred from using the U.S. financial system to funnel goods and services to sanctioned entities.

Huawei and its lawyers have said the company operates in strict compliance with applicable laws.


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