A Canadian researcher who was jailed for two-and-a-half years in China for a crime he says did not happen sued a Vancouver-based mining company in B.C. Supreme Court this week for defamation, false imprisonment and corruption of foreign officials in relation to his incarceration.

Kun Huang, a 37-year-old University of B.C. graduate, was released from prison last month, then deported home to Vancouver, where he filed a claim that reads like a spy thriller. He alleges that Silvercorp Metals used its influence on public officials in China as well as financial support to punish him in retaliation for a report he contributed to that caused Silvercorp’s shares to plummet.

“As a result of Silvercorp’s intentional wrongdoing and its utilization of the (local police) as its agent, Mr. Huang ... was subjected to years of false imprisonment with predictable deleterious effects on his mental and physical health,” states the claim.

The allegations have not been proven in court.

Lorne Waldman, a senior vice-president at Silvercorp, which is listed on the Toronto and New York stock exchanges, said in an email that “we do not comment on ongoing litigation.”

Huang’s disconcerting journey through the Chinese prison system began when he arrived at the Beijing airport on Dec. 28, 2011 for a flight out of the country. He was detained and strip-searched, then placed in a cell without charge, according to the claim.

“Nobody said I had any rights,” Huang told The Vancouver Sun in a Wednesday interview. “I couldn’t call anyone … they didn’t say I could have a lawyer or anything like that. I just felt like I was ‘vanished’.”

In 2006, Huang began to work for Eos, an investment fund that researches Chinese companies, searching for under or overvalued companies to invest in. Huang soon started researching Silvercorp to get a better picture of its operations, he said.

In September 2011, Alfredlittle.com — a company owned by Jon Carnes, the fund manager of Eos — produced a report that relied in part on Huang’s work in China. The report claimed, among other things, that deliveries of ore to Silvercorp’s mills did not support the mine’s reported output and that its North American market capitalization was overvalued.

Silvercorp sued Alfredlittle.com for defamation three days later — a claim that was later dismissed — and, according to Huang’s claim, told securities regulators the report amounted to illegal short-selling tactics.

Short selling is when an investor borrows then sells a number of shares with the intention to replace them at a later date, after the given company’s stock price has fallen.

Carnes did indeed “short” Silvercorp stock after he published the Alfredlittle.com report, according to fraud allegations against Carnes made by the B.C. Securities Commission. The BCSC, in a claim set to be heard on Nov. 10, alleges that Carnes closed his short position in Silvercorp after its share price fell 20 per cent on the back of his misleading report — a transaction that earned him nearly $2.8 million US.

After his arrest at the airport, police from Luoyang — the closest city to Silvercorp’s main mine — arrived in Beijing three days later and drove him 800 kilometres from Beijing back to Luoyang in a rental car paid for by Silvercorp, the claim alleges. En route, police told Huang he was the subject of a joint RCMP investigation, he said.

In Luoyang, local police jailed Huang for about three weeks and interrogated him based on questions provided by Silvercorp, according to the claim, before they released him from custody, placing him under house arrest. In July 2012, police returned Huang to prison, where he spent nearly a year in a 300-square-foot cell with dozens of other prisoners in harsh and inhumane conditions.

He was “forced to scrub the sick bay using his bare hands ... causing his hands to bleed and exposing him to disease and infection.”

A year after he was sent to prison, Huang was finally charged, and in September 2013 he was convicted of criminal defamation in a one-day, closed-door trial attended only by his and Silvercorp’s lawyers, according to Huang.

“The Silvercorp lawyers actively participated in the proceeding, acting effectively as the prosecutor,” according to the claim.

Huang’s parents met him at the airport when he was finally freed and flown back to Vancouver, where he continues to work for Jon Carnes.

”I was really emotional,” he said. “I was finally able to meet with people who care about me. That was a good feeling.”

Huang is seeking a range of damages against the company for its alleged role in his arrest and imprisonment.

“I just want to have some justice. I want to rehabilitate my life and my reputation.”

mrobinson@vancouversun.com

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