Canadian sues Silvercorp over ‘false imprisonment’ in China – by Nathan Vanderklippe (Globe and Mail – August 20,2014)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

BEIJING — A Canadian man who spent years behind bars in China has filed a lawsuit accusing a mining company of conspiring with Chinese authorities to have him arrested and detained.

Kun Huang was an investigator for a hedge fund manager who in September, 2011, claimed that ore estimates at a Chinese mine owned by Vancouver-based Silvercorp Metals Inc. were too good to be true. Three months later, Chinese officials detained Mr. Huang at the Beijing airport, strip-searched him, seized his computer and placed him in a lengthy detention that culminated in a single-day closed-door trial and a two-year sentence for criminal defamation.

He was released on July 17, and returned to Canada the next day. Now, in a lawsuit filed Tuesday in the Supreme Court of British Columbia, Mr. Huang claims that Silvercorp masterminded his detention as a reprisal for his research, whose publication prompted a steep decline in the company’s share price.

Silvercorp, his court filing claims, effectively enlisted the local Chinese police as its “agent,” giving them money, encouragement and guidance “to falsely imprison and then later knowingly bring baseless criminal charges against Mr. Huang.”

After learning of the lawsuit, the Globe and Mail contacted Silvercorp late on Tuesday seeking comment. Officials from the company have not yet responded. Silvercorp has, over the years, issued a series of statements saying it would “fight to the death” against the 2011 report.

A Globe and Mail investigation in 2012 found evidence and documents suggesting that a Silvercorp subsidiary paid for hotels rooms used by police who investigated Mr. Huang, and that those investigators at one point used a private car owned by that subsidiary. A Silvercorp regulatory filing also contained information that appeared to come from Mr. Huang’s computer, which was in the possession of the police.

Mr. Huang’s lawsuit seeks damages “for recovery of a life, reputation and freedoms that were critically impaired by the malicious actions of Silvercorp,” which, it says, resulted in “false imprisonment with predictable deleterious effects on his mental and physical health.”

In an interview, Mr. Huang said cash is not his primary consideration.

“I don’t think money is the issue here. It’s more like I want to rehabilitate my reputation and my life in Canada,” he said. “I felt like I was wronged in China. Somehow, there has got to be justice in Canada. There is no justice in China.”

The damaging report that Mr. Huang worked on was published in 2011 by Jon Carnes, who heads EOS Funds, a hedge fund that made nearly $2.8-million (U.S.) when the Silvercorp shares sank.

Mr. Huang worked, and continues to work, with Mr. Carnes, who said the Canadian civil case provides a venue to subpoena documents from Silvercorp.

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