Canadian analyst sues mining firm for damages after jail time in China

PUBLISHED : Sunday, 24 August, 2014, 5:22am
UPDATED : Monday, 25 August, 2014, 2:42pm

A Canadian investment analyst who spent two years in a Chinese prison has filed a claim for damages in the British Columbia Supreme Court against a mining company, accusing it of orchestrating his arrest and detention.

Huang Kun, a researcher for hedge fund Eos Holdings, helped research a 2011 report that questioned the accounts of Silvercorp Metals, whose most lucrative mining assets are held in a joint-venture company with the local government in Henan province.

Silvercorp's Toronto-listed shares dropped 20 per cent shortly after the report's publication, and are now trading 80 per cent below the pre-report price.

Several months after the report was published, Huang was arrested at Beijing Capital International Airport, strip-searched and then driven by Henan police officers to Luoyang , a city close to Silvercorp's main mines, according to court filings.

Huang said he was interrogated for three weeks, with police often telephoning Silvercorp representatives for instructions, before being released in January 2012 on condition he did not leave China. Silvercorp covered his hotel and transport costs and he has a hotel receipt to prove this, Huang told the Sunday Morning Post.

Information taken from his seized laptops and external hard drive was used in a defamation suit brought by Silvercorp against Eos, he said. The suit was later dropped, according to reports.

A Silvercorp representative said the company would not comment on ongoing litigation. In a 2012 media interview, Silvercorp chairman Feng Rui denied the firm was involved in Huang's arrest. Feng also said that information used in his defamation suit against Eos came from publicly available sources.

In July 2012, shortly after a New York Times article referenced Eos' Silvercorp report, Huang said he was again arrested by Henan police, but this time at his home in Chengdu in Sichuan province.

"The police said someone was not happy with recent news and said that I shouldn't talk so much," he said.

Huang was thrown in jail and last September was charged with criminal defamation.

He was released last month and returned to Canada.


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