Canada Orders Dissolution of Two Companies on National-Security Grounds — Update

By Paul Vieira

OTTAWA--Canada on Friday ordered the dissolution of two companies on national-security grounds, the latest effort to take a tougher line on foreign investment that could harm the country's interest.

Canada's Industry Minister François-Philippe Champagne didn't disclose what type of threat the two firms posed.

One of the companies, Bluvec Technologies, produces drone-detection technology that identifies unwanted drones and prevents them from accessing specified air space.

The other company, Pegauni Technology, has a LinkedIn page describing itself as a wireless security firm.

Both companies benefited from foreign investors, according to Champagne. Based on evidence provided by security and intelligence partners, Champagne said he ordered that both companies, based in Vancouver, British Columbia, cease operations in Canada.

An employee at Bluvec said questions from the media had to be posed in an email. A representative for Bluvec didn't immediately respond. Junfeng "Jack" Jia, listed as Bluvec's founder and chief executive, didn't immediately respond to a request for comment via message on the digital platform LinkedIn. Attempts to reach Pegauni weren't successful.

"While Canada continues to welcome foreign direct investment, we will act decisively when investments threaten our national security," Champagne said. A spokeswoman for the minister declined to elaborate on the security threat, citing confidentiality provisions in Canada's foreign-investment law.

In the fall of 2022, Champagne ordered three Chinese companies to liquidate their holdings in three Canadian companies involved in critical minerals, also on national-security grounds. The tougher approach, officials say, are meant to address changes in the geopolitical landscape to counter disruptive actors.

According to court documents filed in British Columbia, Bluvec was incorporated in March 2018. Prior to founding Bluvec, Jia was chief technology officer at another drone detection company in Canada that operated as a subsidiary of Shengkong, a company in Shenzhen, China. The court documents also indicate that Jia worked at a cybersecurity company in China, Fortinet, dating back to 2007 before he eventually moved to Canada.

Among Bluvec's biggest customers was a Chinese company, Beijing Lizheng Technology Co. Inc., which also incorporated in March 2018, according to the court document, related to a lawsuit against Bluvec and Jia.

Write to Paul Vieira at paul.vieira@wsj.com

(END) Dow Jones Newswires

May 24, 2024 18:58 ET (22:58 GMT)

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