US racketeering trial spoils Huawei’s tri-fold smartphone rollout
Less than 24 hours after unveiling a $2,980 tri-fold smartphone to challenge Apple, Huawei entered a very different arena: a New York courtroom where US prosecutors will try to prove its global rise was fuelled by trade-secret theft, fraud and sanctions violations.
Jury selection in the long-running criminal case was due to begin on Tuesday in Brooklyn federal court, according to AP. Huawei has pleaded not guilty and denies wrongdoing.
The case originates from a 16-count superseding indictment filed in 2020 against Huawei and several subsidiaries. US prosecutors accuse the Chinese conglomerate of operating a racketeering enterprise that sought confidential technology from six American companies.
The alleged targets included technology for internet routers, smartphone antennas and phone-testing robots. The US Department of Justice insists that Huawei employees allegedly received encouragement to obtain competitors’ confidential information and could receive bonuses for doing so.
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Huawei racketeering trial targets the secrets behind its rise
Huawei concealed its control of Skycom, a Hong Kong company that sold telecommunications equipment in Iran, to commit bank and wire fraud, prosecutors say. Huawei used global banks to process transactions while misrepresenting Skycom as an independent business partner, according to the indictment.
Further allegations concern business conducted in North Korea and Huawei equipment that prosecutors say helped Iranian authorities monitor demonstrators during anti-government protests in 2009. All remain allegations to be tested at trial.
The timing creates a striking contrast. Huawei launched its Mate XT2 on Monday as it battles Apple for China’s premium smartphone market. The company led that market with a 22.6% share in the second quarter and accounted for 68% of Chinese foldable-phone shipments, Reuters reported.
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Meng Wanzhou’s Iran statement follows Huawei into court
Huawei chief financial officer Meng Wanzhou, the daughter of founder Ren Zhengfei, is not a defendant in the trial. However, prosecutors may use a statement of facts she signed under a 2021 deferred prosecution agreement.
Meng acknowledged making misleading statements to a bank about Huawei’s relationship with Skycom and its Iranian operations. A judge ruled in June that the statement could be introduced as evidence against Huawei.
She was arrested in Canada in 2018 and battled extradition for nearly three years. She returned to China after they reached the agreement and later dropped the charges against her. China’s release of two detained Canadian citizens after her release turned the case into a major diplomatic confrontation.
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Huawei argues that the prosecution is politically motivated and that some alleged conduct occurred outside US jurisdiction. Its lawyers have also challenged the fraud allegations and described parts of the indictment as insufficiently specific.
