Canadian wins right to sue Silvercorp over ‘false imprisonment’ in China

Canadian wins right to sue Silvercorp over ‘false imprisonment’ in China

Worker hauling ore out of Ying tunnel. (Image courtesy of Silvercorp)

A Canadian man who spent years behind bars in China has won the right to sue Vancouver-based Silvercorp Metals (TSE, NYSE:SVM) for allegedly conspiring with Chinese authorities to have him arrested and detained.

The B.C. Supreme Court, Canadian Press reports, rejected a bid by the miner to have Kun Huang’s allegations of “false imprisonment” thrown out. Silvercorp, which operates four silver-lead-zinc mines in Henan province and is also advancing a silver project in northern B.C., had claimed in court that the case would be better dealt with in the Chinese justice system.

Kun Huang was an investigator for a hedge fund manager who in September, 2011, claimed that ore estimates at a Chinese mine owned by Silvercorp were too good to be true. Three months later, he was detained at the Beijing airport, where Chinese officials allegedly strip-searched him, seized his computer and placed him in a lengthy detention that culminated in a single-day closed-door trial.

Kun Huang was found guilty of “harming the business credibility and product reputation” of Silvercorp and sentenced to two years in prison but was released and deported, at his own expense, to Canada in July last year.

None of the allegations related to this case have ever been proven in court.