Two B.C. companies ordered to shut down on national security grounds

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Two B.C. businesses have been ordered to cease operations by the Canadian government on national security grounds.

Ottawa has ordered the dissolution of Bluevec Technologies Inc. and Pegauni Technology Inc. following a national security review, Industry Minister François-Philippe Champagne said on Friday.

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He did not say what kind of national security threat the two companies pose, but suggested the Burnaby-based firms received foreign investment.

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“The government’s decisions are based on facts and evidence and on the advice of Canada’s security and intelligence community and other government partners,” said Champagne. “While Canada continues to welcome foreign direct investment, we will act decisively when investments threaten our national security.”

A ministry spokeswoman said it cannot provide more details citing confidentiality provisions in the Investment Canada Act, the legislation that allows for a national security review of any foreign investment into the Canada, regardless of its value.

B.C. corporate registry records show both companies share Junfeng (Jack) Jia as CEO and sole director and the same mailing address in Surrey. The companies have offices in industrial parks in Burnaby about 500 metres apart.

Bluevec Technologies is an anti-drone company founded in March 2018. It sells wireless drone defence technology that allows users to “secure the sky” against unwanted drones by detecting a drone’s wireless signals, then blocking or disabling the device.

The technology can be used in a range of applications, including protecting a person’s privacy, safeguarding air traffic lanes, and preventing drones from dropping contraband into prisons.

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Bluevec has not yet responded to a request for comment about the federal order of dissolution.

The second company, Pegauni Technology, was founded in January 2018. According to its LinkedIn page, the company makes wireless security products. The company appears to have been shuttered, and its website is no longer active.

Bluevec was the subject of a civil suit by competitor Vancouver-based SkyCope Technologies, which alleged Bluevec stole trade secrets through former SkyCope employees and gained a competitive advantage.

Last year, B.C. Supreme Court Justice Nitya Iyer ordered Jia, Bluevec and another Bluevec employee to pay $800,000 to SkyCope for misusing its confidential information and selling a direction-finding code to Chinese anti-drone company Beijing Lizheng Technology.

In court, Jia testified Lizheng was Bluevec’s biggest customer, but SkyCope alleged Jia was the owner of the Beijing company. Court records cited a decision on a separate case by a Beijing arbitration commission that found Jia was a shareholder in Lizheng and held shares in the company held in trust by other individuals.

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The trial, which was held over 10 days in 2021 and 2023, was marked by “deep animosity” between Jia and Zhenhua (Eric) Liu, founder of SkyCope, said Iyer.

The two met when working in the Beijing office of Fortinet, a cybersecurity firm. Both transferred to Fortinet’s Vancouver office and became good friends. After Liu left the company in 2016 to form SkyCope and work on developing anti-drone technology, Jia joined him months later as SkyCope’s chief technology officer.

The relationship soured and, in 2017, Liu fired Jia, who went on to form Bluevec.

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