A Chinese technology executive held in Canada on US fraud charges has been freed from house arrest after American prosecutors agreed to drop an extradition request against her.

Meng Wanzhou, chief financial officer of Huawei, was detained in December 2018 at the request of the US.

In a court appearance, a Canadian judge ordered that she be immediately released.

The case infuriated China and strained relations with the US and Canada. It has been the subject of intense negotiations between US and Chinese diplomats.

The US alleged Ms Meng misled the bank HSBC over the true nature of Huawei's relationship with a company called Skycom, putting the bank at risk of violating US sanctions against Iran.

On Friday the US Department of Justice (DOJ) said it had reached a deferred prosecution agreement.

This means the DOJ would hold off from prosecuting Ms Meng until December 2022. If she complied with conditions set by court, the case would eventually be dropped.

The deal allows her to formally deny guilt while also acknowledging the allegations laid out by the Americans.

However, the DOJ said it was continuing to prepare for trial against Huawei.

US prosecutors also recommended that Ms Meng be released on a personal recognisance bond, which will allow her to be freed without any collateral.

Later on Friday, Canadian prosecutors told a court in Vancouver that they had withdrawn efforts to extradite her to the US and that she should be discharged from detention.

She had been under house arrest in her multimillion-dollar Vancouver home for three years.

Ahead of the court appearance, Ms Meng was seen entering the building accompanied by Chinese consular officials.

The judge subsequently ordered that she go free.

She could fly back to China as soon as Saturday, a person with knowledge of the matter told the BBC.

As part of the deal, Ms Meng agreed to a "statement of facts" admitting that she knowingly made false statements to HSBC.

The DOJ said Ms Meng had "taken responsibility for her principal role in perpetrating a scheme to defraud a global financial institution".

Ms Meng is the elder daughter of billionaire Ren Zhengfei, who set up Huawei in 1987. The company is now the largest telecom equipment maker in the world.

He served in the Chinese army for nine years, until 1983, and is also a member of the Chinese Communist Party.

Huawei has faced accusations that the Chinese authorities could use its equipment for espionage - allegations it denies.

In 2019, the US imposed sanctions on Huawei and placed it on an export blacklist, cutting it off from key technologies.

The UK, Sweden, Australia and Japan have also banned Huawei, while other countries including France and India have adopted measures stopping short of an outright ban.

A few days after Ms Meng was arrested, China detained two Canadian citizens, Michael Spavor and Michael Kovrig, on suspicion of spying.

Critics have accused China of treating them as political bargaining chips, held as part of what is known as "hostage diplomacy,. China denies this.

(BBC)

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