Canada Orders Dissolution of Two Companies on National-Security Grounds — 2nd Update

By Paul Vieira

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

François-Philippe Champagne, head of Canada's Ministry of Innovation, Science and Industry, 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 firm, Pegauni Technology, has a LinkedIn page describing itself as a wireless-security firm.

Corporate registry records in British Columbia suggest both companies share the same sole director, Junfeng "Jack" Jia, and share the same office address, a suburban home southeast of Vancouver, British Columbia, and 14 miles north of the U.S. border.

An employee at Bluvec said questions from the media had to be posed in an email. A representative for Bluvec didn't immediately respond. 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.

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 cease operations in Canada.

"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, is 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 unit of Shengkong, a company in Shenzhen, China. 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, which also incorporated in March 2018, according to the court document related to a lawsuit against Bluvec and Jia.

--Bob Mackin in Vancouver, British Columbia, contributed to this article.

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

(END) Dow Jones Newswires

May 24, 2024 19:43 ET (23:43 GMT)

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