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Kun Huang suing Vancouver-based mining company Silvercorp for allegedly directing Chinese authorities to imprison him

UBC business grad once jailed in China now suing Vancouver-based Silvercorp Metals

Kun Huang is suing Silvercorp, a Vancouver-based mining company, for allegedly directing Chinese authorities to imprison him after he participated in research that negatively impacted Silvercorp’s value.

Photograph by: NICK PROCAYLO , PROVINCE

Before seeing his psychologist, Kun Huang is talking about his nightmares.

He says he jolts awake and in his mind he’s in a 300-square-foot cell lying on the concrete floor with the toilet hole about 48 inches from his head. Then he feels his hands. They are not raw and bleeding. Not anymore. He’s in his home in Vancouver.

“Most of the fear is that I’m back in the Chinese cell,” says Huang, a Canadian hedge-fund analyst. “It’s dirty, the lights are on 24 hours per day. You can’t sleep. It was psychological torture to break you down.”

Huang was released from prison and deported from China in July 2014 after about three years’ detention. His psychologist has diagnosed him with PTSD and depression due to the experience.

But he has just received several pieces of hopeful news. A B.C. Supreme Court judge recently decided courts in B.C., rather than courts in China, are the appropriate place for Huang, a 38-year-old UBC business graduate, to sue Vancouver-based mining companySilvercorp Metals Inc. over his imprisonment.

And second, last week a B.C. Securities Commission panel dismissed fraud allegations connected to Huang’s work in China.

‘SHORT SELLING’

In a civil claim containing allegations perhaps difficult for Canadians to believe, and not proven in court, Huang claims Silvercorp paid, directed, corrupted and conspired with police in China in order to mastermind a plan to falsely imprison him and funnel defamatory information back to Canada.

In 2011, Huang and a team of “on-the-ground” investigators in China were employed by a Vancouver hedge fund to probe Silvercorp’s business. Huang’s findings suggested ore estimations in a Silvercorp mine in Luoyang were too high.

Huang’s hedge-fund boss published a damaging report based partly on Huang’s investigation and profited from a “short selling” position after Silvercorp’s shares plummeted. According to the claim, Silvercorp — a partner with the Chinese government on the mine Huang investigated — promised a “battle to the death” with “its enemies,” which included Huang.

In December 2011, months after the damaging report, Huang was detained in Beijing as he was trying to leave the country. His passport had been flagged by police in Luoyang, where Silvercorp is a major economic driver and taxpayer, according to the review of alleged facts in a recent ruling from B.C. Supreme Court Madame Justice Carol Ross.

Huang was strip-searched by airport authorities and his possessions were seized, including his laptops, hard drive and passport.

HUNDREDS OF ANALYSTS IMPRISONED

The claim also alleges he was transported to a Luoyang prison and interrogated. Silvercorp executives texted instructions and questions to police, funded them, and at times company employees provided “on the ground” support, Huang alleges.

According to Chinese media, hundreds of hedge-fund analysts like Huang have been imprisoned. One of Huang’s colleagues escaped after an interrogation, but Huang never admitted wrongdoing, and he maintains his research was 100 per cent accurate.

In 2013, Huang was eventually tried and convicted of harming the business credibility of Silvercorp, in a hearing where Silvercorp’s lawyers “effectively acted as the prosecutor” according to Huang’s lawsuit.

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