Huawei says will fight US prosecutors' motion to disqualify its lawyer

Huawei Technologies said it will “vigorously oppose” a motion filed by US prosecutors on Thursday to disqualify its lead defence lawyer from a case accusing the Chinese company of bank fraud and sanctions violations.

According to a filing in the US District Court in Brooklyn, New York, the US government sought to remove James Cole from the case.

Cole was the No.2 official at the Justice Department between 2011 and 2015, a period when the United States was obtaining information on how Huawei might have been doing business in Iran in violation of US sanctions.

The filing did not make public why it is seeking to remove Cole from the case. In a letter to the court, prosecutors said they had filed a sealed, classified motion to disqualify Cole and expected to file a public version by May 10.

Cole, the former US deputy attorney general, is now a partner at law firm Sidley Austin in Washington. He declined to comment.

Huawei said in an emailed statement to Reuters that it chose Jim Cole as its lawyer in 2017. “We have seen no facts from the government that would justify disqualifying him and denying Huawei its constitutional rights. Huawei will vigorously oppose the government’s motion,” it said.

The case against Huawei has ratcheted up tensions between Beijing and Washington as the world’s two economic powers try to close a trade deal.

Angering the Chinese, the company’s Chief Financial Officer Meng Wanzhou, daughter of Huawei’s founder Ren Zhengfei, was arrested in Canada in December at the behest of US authorities.

Huawei was charged with bank and wire fraud, violating sanctions against Iran and obstructing justice. Meng, who must answer to some of the charges, has said she is innocent and is fighting extradition. She is due in court in Vancouver on May 8.

Cole entered a not guilty plea on behalf of the company and its US subsidiary on March 14 in Brooklyn.

The crux of the case is that Meng and Huawei allegedly conspired to defraud HSBC Holdings Plc and other banks by misrepresenting Huawei’s relationship with Skycom Tech Co Ltd, a suspected front company that operated in Iran.

Huawei has said Skycom was a local business partner, while the United States maintains it was an unofficial subsidiary used to conceal Huawei’s Iran business.

US authorities claim Huawei used Skycom to obtain embargoed US goods, technology and services in Iran, and to move money via the international banking system.

US prosecutors said last month they planned to use information about Huawei obtained through secret surveillance in the case.

In March, Reuters detailed how US authorities secretly tracked Huawei’s activities, including by collecting information copied from electronic devices carried by Chinese telecom executives travelling through airports.

In February, Reuters exclusively reported how an internal HSBC probe helped lead to the US charges against Huawei and its CFO.

The indictment references reporting by Reuters from six years ago that Skycom offered to sell embargoed Hewlett-Packard computer equipment to Iran’s largest mobile-phone operator. The reporting detailed links between Huawei and Skycom, including that Meng had served on Skycom’s board of directors in 2008 and 2009.