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Apparently Huawei's efforts to blame mess on contractor were indeed misleading at best

In December, Reuters showed documents indicating that top Chinese telecommunications equipment and smartphone maker Huawei Technologies Comp. (SHE:002502) had planned to smuggle Hewlett-Packard Comp. (HPQ) to Iran, seemingly in direct violation of U.S. law.  The report was a thorny one of Huawei, who had just been grilled by Congress over similar contraband and security concerns.

"Aha, but not so fast!" said Huawei, claiming the plan was the work of a partner, an Iranian telecommunications firm called Skycom, who maintained offices in Iran and Hong Kong.  The claim seemed a bit far-fetched given that the documents carried a Huawei stamp and many employees reportedly carried Huawei badges.

But now Reuters has produced another piece of evidence bringing those claims into question.  Digging into Hong Kong's Companies Registry, it found that Cathy Meng, Huawei's chief financial officer and the daughter of company founder Ren Zhengfei, was a board member on Skycom's board between February 2008 and April 2009.  The plan to smuggle the electronics occurred in late 2010.

Close ties bind Huawei's controlling family and Skycom.  Ms. Meng in 2007 served as the company secretary for Huawei's parent company, which also held all the shares of Skycom stock.  In Nov. 2007 as Huawei eyed a broader role in the U.S. market, all the shares of Skycom were conveniently transferred to a holding company -- Canicula Holdings Ltd. -- in the Mauritius Islands.

Huawei offices
Huawei insists its open, but hides behind its veil of privacy. [Image Source: AFP]

Yet more evidence was unearthed in the form of a 2009 press release, in which Skycom CEO Zhang Hongkai signs the joint release with a state-run Iranian news agency as "Mr. Zhang Hongkai, CEO from Huawei Iran Office."

Past financial profiling reports have labeled Skycom a "Huawei subsidiary".

Given that both Skycom and Huawei are private, it's harder to track their activities as they file less public documents.  Huawei insists that it’s reducing its trade with Iran.  In an interview with journalists in Beijing this week Cathy Meng comments, "We will honor our commitment to transparency and openness."

The statement seems somewhat ironic given the fact that the body of evidence seems to suggest a deeply different story regarding the Iran incident to what Huawei claims.  As a private company Huawei has every right to keep its finances private -- but it certainly doesn't help when there's a body of incriminating evidence and Huawei is keeping documents that could vindicate it under lock and key.

Source: Reuters





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