Huawei executive Meng Wanzhou was dealt another legal setback Tuesday when a Canadian extradition judge refused to hear from the telecom giant's accountant on loans at the heart of US bank fraud charges.

Meng, 49, is fighting extradition to the United States where she faces charges of bank fraud and conspiracy related to a Huawei subsidiary's alleged violations of US sanctions on Iran.

Her lawyers sought to have the accountant refute the fraud claims, saying Meng's alleged lies to the HSBC investment bank about Huawei's relationship with subsidiary Skycom in order to secure loans did not put HSBC at risk of losses because Huawei did not tap those funds.

"This evidence is not relevant to the issues in the extradition hearing," associate chief justice Heather Holmes said in her ruling.

A secondary defense claim that Huawei subsidiaries and not the parent company were the borrowers was also rejected.

Holmes noted that the US alleged "HSBC was misled by Ms. Meng's misrepresentation into continuing its banking relationship with the Huawei group of companies, not with the Huawei parent specifically," and also that, "a person may commit a fraud by misleading the victim into making a loan to someone else," such as a holding company or subsidiary.

The accountant was the third defense witness the court has declined to hear.

In court Tuesday, Canadian government lawyer Robert Frater, meanwhile, urged the judge to dismiss defense claims of a secret plot by Canadian and US authorities to collect evidence against Meng while she was detained during a stopover at the Vancouver airport in December 2018.

The defense has accused Canadian border guards and federal police of interrogating her without access to a lawyer and passing passcodes for her seized electronic devices to the FBI in breach of her rights.

Frater said the defense has spun simple errors into an "exciting narrative" that "involves a covert criminal investigation, witnesses lying on an almost industrial scale, and a cross-border cover-up."

"We say the story doesn't make sense," he said. "The witnesses who testified before you were anything but liars -- they admitted errors in a candid way and we say they are believable witnesses one and all."

Meng and Huawei have denied any wrongdoing. She remains under house arrest in her Vancouver mansion while the extradition case is scheduled to wrap up in May, barring appeals.

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