NEW YORK/LONDON: An internal investigation by HSBC Holdings PLC into Huawei Technologies' connections to a suspected front company in Iran found that the Chinese telecommunications equipment maker maintained close financial ties to the firm years after purportedly selling the unit, documents reviewed by Reuters show.
U.S. authorities allege Huawei used Skycom to obtain embargoed U.S. goods and technology in Iran and to move money out of the country via the international banking system. As a result of Huawei's deception, U.S. authorities allege, HSBC and other banks cleared more than US$100 million of transactions related to Skycom through the United States that potentially violated economic sanctions Washington had in place at the time against doing business with Iran.
The HSBC documents contain new financial details about Huawei's relationship with Skycom and the company that Huawei claims it sold Skycom to in 2007, Canicula Holdings Ltd. All three firms previously had bank accounts at HSBC, with the Skycom and Canicula accounts part of what the bank internally called the"Huawei Mastergroup."
After HSBC asked Huawei in 2013 to close the Skycom and Canicula accounts, Huawei employees assisted the bank. At Huawei's request, the remaining funds in the Skycom account were transferred to a Huawei bank account, according to the documents. The indictment alleges that banks in part relied on Huawei's false statements in the Reuters stories – that it hadn't violated sanctions on Iran and that Skycom was a local partner – to continue doing business with Huawei and Skycom.
The bank's Huawei probe found that in August 2013, at Huawei's request, HSBC's then deputy head of global banking for the Asia Pacific region, Alan Thomas, met with Meng. According to the HSBC documents, Meng later provided Thomas with a PowerPoint presentation in English that stated that Huawei had sold its shares in Skycom and that she was no longer on its board. The presentation described Skycom as a Huawei"business partner" in Iran.
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