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New documents link Huawei to suspected front companies in Iran, Syria

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The U.S. case against the chief financial officer of China’s Huawei Technologies, who was arrested in Canada last month, centres on the company’s suspected ties to two obscure companies. One is a telecom equipment seller that operated in Tehran; the other is that firm’s owner, a holding company registered in Mauritius.

U.S. authorities allege CFO Meng Wanzhou deceived international banks into clearing transactions with Iran by claiming the two companies were independent of Huawei, when in fact Huawei controlled them. Huawei has maintained the two are independent: equipment seller Skycom Tech Co. Ltd. and shell company Canicula Holdings Ltd.

But corporate filings and other documents found by Reuters in Iran and Syria show that Huawei, the world’s largest supplier of telecommunications network equipment, is more closely linked to both firms than previously known.

The documents reveal that a high-level Huawei executive appears to have been appointed Skycom’s Iran manager. They also show that at least three Chinese-named individuals had signing rights for both Huawei and Skycom bank accounts in Iran. Reuters also discovered that a Middle Eastern lawyer said Huawei conducted operations in Syria through Canicula.

The previously unreported ties between Huawei and the two companies could bear on the U.S. case against Meng, who is the daughter of Huawei founder Ren Zhengfei, by further undermining Huawei’s claims that Skycom was merely an arms-length business partner.

Huawei, U.S. authorities assert, retained control of Skycom, using it to sell telecom equipment to Iran and move money out via the international banking system. As a result of the deception, U.S. authorities say, banks unwittingly cleared hundreds of millions of dollars of transactions that potentially violated economic sanctions Washington had in place at the time against doing business with Iran.

Meng did not respond to a request for comment by Reuters, and Huawei declined to answer questions for this story. Canicula’s offices could not be reached. A Justice Department spokesman in Washington declined to comment.

Meng was released on C$10 million ($7.5 million) bail on Dec. 11 and remains in Vancouver while Washington tries to extradite her. In the United States, Meng would face charges in connection with an alleged conspiracy to defraud multiple financial institutions, with a maximum sentence of 30 years for each charge. The exact charges have not been made public.

Huawei said last month it has been given little information about the U.S. allegations “and is not aware of any wrongdoing by Ms. Meng.” The company has described its relationship with Skycom as “a normal business partnership.” It has said it has fully complied with all laws and regulations and required Skycom to do the same.

Meng’s arrest on a U.S. warrant has caused an uproar in China. It comes at a time of growing trade and military tensions between Washington and Beijing, and amid worries by U.S. intelligence that Huawei’s telecommunications equipment could contain “backdoors” for Chinese espionage.

Meng ‘repeatedly lied,’ U.S. claims

The firm has repeatedly denied such claims. Nevertheless, Australia and New Zealand recently banned Huawei from building their next generation of mobile phone networks, and British authorities have also expressed concerns.

Articles published by Reuters in 2012 and in 2013 here about Huawei, Skycom and Meng figure prominently in the U.S. case against her. Reuters reported that Skycom had offered to sell at least 1.3 million euros worth of embargoed Hewlett-Packard computer equipment to Iran’s largest mobile-phone operator in 2010. At least 13 pages of the proposal were marked “Huawei confidential” and carried Huawei’s logo.

Huawei has said neither it nor Skycom ultimately provided the U.S. equipment.

Reuters also reported numerous financial and personnel links between Huawei and Skycom, including that Meng had served on Skycom’s board of directors between February 2008 and April 2009.

Several banks questioned Huawei about the Reuters articles, according to court documents filed by Canadian authorities at the request of the U.S. for Meng’s bail hearing in Vancouver last month.

According to the documents, U.S. investigators allege that in responding to the banks, which weren’t named, Meng and other Huawei employees “repeatedly lied” about the company’s relationship with Skycom and failed to disclose that “Skycom was entirely controlled by Huawei.”

U.S. authorities also allege that at a private meeting with a bank executive, in or about August 2013, Meng said Huawei had sold its shares in Skycom, but didn’t disclose that the buyer was “a company also controlled by Huawei.”

The court documents allege that Huawei told the executive’s bank that the Chinese company had sold its shares in Skycom in 2009 — the same year Meng stepped down from Skycom’s board. Skycom’s buyer wasn’t identified in the documents.

But Skycom records filed in Hong Kong, where the company was registered, show that its shares were transferred in November 2007 to Canicula, which was registered in Mauritius in 2006. Canicula continued to hold Skycom shares for about a decade, Skycom records show.

A “Summary of Facts” filed by U.S. authorities for Meng’s Canadian bail hearing states: “Documents and email records show that persons listed as ‘Managing Directors’ for Skycom were Huawei employees.” None of those individuals were named.

A company record filed by Skycom in Iran that was entered in the Iranian registry in December 2011 states that a “Shi Yaohong” had been elected as manager of Skycom’s Iran branch for two years. Huawei employs an executive named Shi Yaohong.

According to his LinkedIn profile, Shi was named Huawei’s “President Middle East Region” in June 2012. An Emirates News Agency press release identified him in November 2010 as “President of Huawei Etisalat Key Account.” Etisalat is a major Middle Eastern telecommunications group and a Huawei partner.

Shi, now president of Huawei’s software business unit, hung up the phone when Reuters asked him about his relationship with Skycom.

The Syrian connection

Many corporate records filed by Skycom in Iran list signatories for its bank accounts in the country. Most of the names are Chinese; at least three of the individuals had signing rights for both Skycom and Huawei bank accounts. (One of the names is listed in the Iranian registry with two slightly different spellings but has the same passport number.) U.S. authorities allege in the court documents filed in Canada that Huawei employees were signatories on Skycom bank accounts between 2007 and 2013.

Records in Hong Kong show that Skycom was voluntarily liquidated in June 2017 and that Canicula was paid about $132,000 as part of the resolution. The liquidator, Chan Leung Lee of BDO Ltd. in Hong Kong, declined to comment.

The Financial Services Commission in Mauritius, where Canicula remains registered, declined to release any of its records to Reuters, saying they were confidential.

Until two years ago, Canicula had an office in Syria, another country that has been subject to U.S. and European Union sanctions. In May 2014, a Middle Eastern business website called Aliqtisadi.com published a brief article about the dissolution of a Huawei company in Syria that specialized in automated teller machine (ATM) equipment. Osama Karawani, an attorney who was identified as the appointed liquidator, wrote a letter asking for a correction, stating that the article had caused “serious damage” to Huawei.

Karawani said the article suggested that Huawei itself had been dissolved, not just the ATM company. In his letter, which was linked to on the Aliqtisadi website, he said Huawei was still in business.

“Huawei was never dissolved,” he wrote, adding that it “has been and is still operating in Syria through several companies which are Huawei Technologies Ltd and Canicula Holdings Ltd.” Huawei Technologies is one of Huawei’s main operating companies.

Karawani didn’t respond to emailed questions from Reuters about Canicula.

U.S. investigators are aware of Canicula’s connection to Syria, according to a person familiar with the probe. Canicula had an office in Damascus and operated in Syria on behalf of Huawei, another person said.

That person said Canicula’s customers there included three major telecommunications companies. One is MTN Syria, controlled by South Africa’s MTN Group Ltd, which has mobile phone operations in both Syria and Iran. MTN has a joint venture in Iran — MTN Irancell — that is also a Huawei customer. MTN advised Huawei on setting up the structure of Skycom’s office in Iran, according to another source familiar with the matter.

“Skycom was just a front” for Huawei, the person said.

An official with MTN said no one at the company was available to comment.

In December 2017, a notice was placed in a Syrian newspaper by “the General Director of the branch of the company Canicula Ltd.” He was not named. It announced that Canicula had “totally stopped operating” in Syria two months before. No explanation was given.

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The ‘Maple Majestic’ wants to be Canada’s homegrown Tesla

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Look out Tesla, Canada has a homegrown electric sedan on the way. Well, that’s if AK International Motor Corporation can drum up enough investment to make its EV a reality. Dubbed the “Maple Majestic,” the vehicle is a battery-electric designed to “excel in extreme climate performance without adversely affecting the climate, as befits a vehicle from Canada,” according to its website.

What’s in a name? — The company says the maple leaf is a “symbol of Canada’s warmth and friendliness towards all cultures,” while “majestic” refers to the country’s “status as a Constitutional Monarchy.”

That patriotism carries over into Maple Majestic’s parent company’s lofty goals. AK Motor founder Arkadiusz Kaminski says he wants the company, which he founded in 2012, to become “Canada’s first multi-brand automotive OEM,” and that the “Maple Majestic is intended to be Canada’s flagship brand of automobiles on the world stage.”

Partnerships are key — “We acknowledge that the best chance for the Maple Majestic brand to succeed, lies in continuing to build the relationship with Canada’s parts suppliers and technological innovators, whether they be academic institutions, corporations, or individual inventors,” the company explains. “We are currently seeking partners in automotive engineering, parts manufacturing, automotive assembly, electric propulsion technology, battery technology, autonomous technology, and hybrid power generation technology.”

In other words, don’t expect to be able to buy a Maple Majestic any time soon… and don’t expect to pour over 0-60 mph times, power output, range, or other key stats, because those don’t currently exist. For now, all we have are pictures and a short video clip. But at least those are arresting.

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PE-backed Quorum Software to merge with Canadian energy tech firm

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Houston-based energy technology company Quorum Software will merge with a Canadian tech firm to bolster its presence in oil and gas services.

Quorum announced Feb. 15 it plans to merge with Calgary, Alberta-based Aucerna, a global provider of planning, execution and reserves software for the energy sector. The combined firm will operate under the Quorum Software brand.

Gene Austin, CEO of Quorum Software, will continue in his capacity as chief executive of the combined firm. Austin, former CEO of Austin-based marketing tech firm Bazaarvoice Inc., became CEO of Quorum in December 2018.

Aucerna co-founder and CEO Wayne Sim will be appointed to the Quorum Software board of directors. Both companies are backed by San Francisco- and Chicago-based private equity firm Thoma Bravo.

“Over the last 20 years, Quorum has become the leading innovator of software deployed by North American energy companies,” said Austin. “Today, Quorum is expanding the scope of our technology and expertise to all energy-producing regions of the globe. Customers everywhere will have access to a cloud technology ecosystem that connects decision-ready data from operations to the boardroom.”

In addition to the merger announcement, Quorum Software announced it had entered into an agreement with Finnish IT firm TietoEvry to purchase TietoEvry’s entire oil and gas business. The agreement, which includes hydrocarbon management, personnel and material logistics software and related services, is valued at 155 million euros, or $188 million, according to a statement from TietoEvry.

“Our three organizations complement each other — from the software that our great people design to the energy markets where we operate,” said Sim. “Our new company will be able to deliver value to our stakeholders, while accelerating the growth of our combined business and the energy industry’s software transformation.”

The combined company will serve over 1,800 energy companies in 55 countries, according to the announcement. With its headquarters in Houston, Quorum will continue to have a significant presence in Calgary and in Norway, the headquarters for TietoEvry’s oil and gas software business. Quorum will have other offices throughout North America, Latin America, Europe, Asia and the Middle East.

As of Sept. 30, 2020, private equity firm Thoma Bravo had more than $73 billion in assets under management. In late December 2020, Thoma Bravo agreed to acquire Richardson, Texas-based tech firm RealPage in a roughly $10 billion acquisition.

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Piece of Kitchener technology lands on Mars on Perseverance rover

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KITCHENER — A piece of Kitchener technology has landed on Mars, thanks to NASA’s Perseverance rover.

The rover settled on the planet’s surface on Thursday afternoon. It’s been travelling through space since it was launched from Cape Canaveral, Fla. in July.

“The whole idea of being on a device that we’re sending to another plant with the express mission of looking for traces of past life, it’s pretty mind boggling actually,” said Rafal Pawluczyk, chief technical officer for FiberTech Optica.

The Kitchener-based company made fibre optic cables for the rover’s SuperCam that will examine samples with a camera, laser and spectrometers.

“The cables that we built take the light from that multiplexer and deliver it to each spectrograph,” Pawluczyk said.

The cables connect a device on the rover to the SuperCam, which will be used to examine rock and soil samples, to spectrometers. They’ll relay information from one device to another.

The project started four years ago with a connection to Los Alamos National Lab, where the instruments connected to the cables were developed.

“We could actually demonstrate we can design something that will meet their really hard engineering requirements,” Pawluczyk said.

The Jezero Crater is where the Perseverance rover, with FiberTech Optica’s technology onboard, landed Thursday. Scientists believe it was once flooded with water and is the best bet for finding any evidence of life. FiberTech’s cables will help that in that search.

Ioannis Haranas, an astrophysicist and professor at Wilfrid Laurier University, said the rover isn’t looking for “green men.”

“They’re looking for microbial, single-cell life, any type of fossils and stuff like that,” Haranas said. “That’s why they chose a special landing site. This could be very fertile land for that.”

“It’s very ambitious,” said Ralf Gellert, a physics professor at the University of Guelph.

Gellert helped with previous rover missions and said it’s the first time a Mars rover has landed without a piece of Guelph technology on it. While he’s not part of Perseverance’s mission, he said the possibilities are exciting.

“Every new landing site is a new piece of the puzzle that you can put together with the new results that we have from the other landing sites,” he said.

“It’s scientifically very interesting because, even though we don’t have an instrument on that rover, we can compare what the new rover Perseverance finds at this new landing site,” he said.

Now that Perseverance has landed on Mars, FiberTech is looking ahead to its next possible mission into space.

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