Ottawa Shuts Down 2 Tech Companies Over National Security Concerns

Minister of Innovation, Science and Industry, Francois-Philippe Champagne rises during Question Period in the House of Commons on Parliament Hill in Ottawa, on Sept. 21, 2023. The Canadian Press/Patrick Doyle

The Canadian government has ordered two tech companies in British Columbia to cease operations due to national security concerns.

Innovation Minister Francois-Philippe Champagne did not give reasons for the concerns when he made his announcement on May 24, saying only that the matter involves “foreign investments.” One of the companies, Bluvec Technologies Inc., specializes in counter-drone defence and was found last year by a B.C. court to have provided stolen technology to a China-based company.

Its founder and CEO, Junfeng (Jack) Jia, worked in China’s tech industry before moving to Vancouver about a decade ago. 

The other company Ottawa has ordered to shut down, Pegauni Technology Inc., is a wireless security products company that appears to have already been shuttered. It’s website is inactive. Both companies were incorporated a few months apart in 2018 and are located on the same street in Burnaby.

The companies have been told to “cease all operations in Canada” following “rigorous scrutiny by Canada’s national security and intelligence community,” Mr. Champagne said. “While Canada continues to welcome foreign direct investment, we will act decisively when investments threaten our national security,” he said.

The action follows a similar measure in 2022 aimed at addressing national security concerns involving Chinese companies. In November 2022, Mr. Champagne ordered three Chinese resource companies to divest their shares in Canadian critical mineral firms, citing national security threats to Canada’s supply chains.

The Epoch Times reached out to both the Department of Innovation and the Canadian Security Intelligence Service regarding the security concerns related to Bluvec and Pegauni, and to Mr. Jia, but did not receive responses as of publication.

Mr. Jia’s LinkedIn page says he has started multiple high-tech security companies over the past several years. His work experience shows positions in the tech industry in Vancouver starting in 2013, and work in security research and development in Beijing and Shanghai prior to 2013.

Pegauni’s website is inactive and its LinkedIn page has little information about it except to say its focus is “designing wireless security products that provide detection, localization, controlling, and protecting of wireless devices, such as mobile phones, wireless connective cars, smart wearable devices, etc.”

The Epoch Times was unable to locate contact information for the company. The publication inquired with the B.C. government regarding any further information it could provide from the company’s registration, but did not receive a reply as of publication.

Bluvec was founded in March 2018 and found itself in a legal dispute shortly thereafter.

Legal Dispute

Vancouver-based competitor SkyCope Technologies Inc. alleged that Bluvec got anti-drone source codes from former SkyCope employees and incorporated it into Bluvec’s direction-finding technology. Bluvec then sold the tech to China-based company Lizheng Technology.

Mr. Jia is a former employee of SkyCope, having worked as the company’s chief technology officer from 2016 to 2017, when he left due to a dispute with SkyCope’s CEO, Zhenhua Liu, according to court documents.

A B.C. Supreme Court decision in 2023 found Bluvec misused the confidential codes from SkyCope and awarded SkyCope $800,000 in damages.

Mr. Jia’s relationship with Lizheng Technology was examined throughout the proceedings. While Mr. Jia attempted to distance himself from the company, B.C. Supreme Court Justice Nitya Iyer said his claims were “not credible.” She found Mr. Jia held shares in Lizheng and thus used the company to compete with SkyCope, a breach of his fiduciary obligation as a former SkyCope employee.