Tuesday, February 20, 2007

Another Canadian held by Chinese

Mississauga electronics supplier held for four months over business dispute
Feb 20, 2007 04:30 AM


A Chinese Canadian businessman from Mississauga has been detained – without formal charge – in Fujian, China, for four months in the midst of a business dispute with his distribution company's Hong Kong supplier.

The Ontario Superior Court of Justice has scheduled a hearing into the dispute involving Jimmy Chen Jian Yuan in March. But his wife, Yang Jian Ping, says the family has been bullied by the supplier's parent company in mainland China, Wanlida Group, to turn over most of the company "in exchange for his release by the Chinese authorities."

The company owned by Chen, 50, distributed DVD players and other electronic equipment under the Malata brand name to stores such as the Bay, Sears, Future Shop and Best Buy. Chen was detained by Chinese customs officials upon his arrival Oct. 13 at Shenzhen, on the Hong Kong-mainland border, while he was headed for a trade show in Guangdong and a scheduled meeting with Wanlida executives in their Fujian headquarters.

He was transferred immediately to the Zhang Zhou City First Police Detention in Fujian, where he remains in custody.

The "notice of detention" issued by the Zhang Zhou police Oct. 16 claimed Chen was being held for "the alleged criminal offence of contract fraud," based on Wanlida's allegations that he had defrauded the company of $5 million (U.S.) in inventory.

In 2005, Malata Group (Hong Kong) filed a civil suit in Ontario, complaining that Chen's company hadn't been paying on time. Chen's company argued that there had been shipping delays and quality issues with the Chinese products, leading to high inventory volume and overdue payments.

The Ontario court has since seized the Canadian company's inventory, worth about $3.7 million, as well as bank accounts totalling close to $1.8 million.

The case is expected to be heard next month.

Chen's Beijing lawyer, Li Ke Min, characterized the case as "a typical economic dispute instead of a contract fraud," and insisted China's courts have no jurisdiction because Chen never entered into a direct contract with the mainland China company. The case is a civil matter, not criminal, he noted.

"To protect the interests of the local Wanlida Group Co. Ltd. (in China), some individuals of Zhang Zhou Public Security Authority intervened in an economic dispute regardless of what laws and regulations had stipulated," Li, of the Beijing Ruide Law Office, said in a Chinese-language statement. "What Zhan Zhou Public Security Authority has done to Chen seriously breached related regulations."

Officials with China's embassy in Ottawa and Wanlida in China could not be reached for comment yesterday due to the Chinese New Year holiday.

However, Chinese officials have recognized Chen's Canadian citizenship and allowed the Canadian consul from Guangdong to visit him twice to ensure he's in good health.

According to court documents filed in Ontario, Chen, an electrical engineer who moved here from Fujian in 1994 as an entrepreneur, began wholesaling Wanlida products – most noted for their popular karaoke devices – in Canada in 1999. He registered the Malata trademark here in 2001. The Canadian company had more than $10 million in annual sales in North America and Europe before the seizure shut it down.

Founded by Wu Hui Tian in 1984, Wanlida is one of China's top electronics enterprises, employing 10,000 people. It focuses on high- and new-technology electronics, from small appliances to GPS products to digital audio and video.

Chen's wife told the Star the conflict emerged in 2004, when Wanlida expressed interest in taking control of the independent Canadian operation. The dispute and subsequent civil lawsuit with the Hong Kong company followed.

"My husband and I went to China in good faith, hoping to talk to Mr. Wu and negotiate a settlement. The officers at the customs simply took him for questioning. They sent me away. No one told me why he was taken into custody," recalled Yang, who hasn't been allowed to see her husband since his arrest. The family lawyer has met Chen only three times, the last in December.

Yang points out that the notice of detention, which she managed to obtain later, describes the date of his arrest as June 14 – four months earlier than his actual arrival.

"I wonder whether my husband's detention was legal, or was it merely a case where the Chinese officials are helping the rich people to get whatever they want?" she said in an interview. "The dispute is already in front of a Canadian court and the case should be dealt with here by the rule of law."

The couple's daughter, Chen Yan, said she and her mother met privately with a Wanlida official in Fujian in November, after her father's arrest, and were offered a settlement that would involve transferring 97 per cent of Malata Canada's assets to Wanlida's Hong Kong subsidiary.

"It was proposed to us verbally. They said they'd not show it to us in writing until we promised we'd sign it. Or my father would be in China for a very long time," recalled Chen Yan, 25. "It became very clear to me that my father's arrest is closely related to (the lawsuit here). They basically are using the Chinese authority to arrest my father, so they can force us to settle in Canada."

The family rejected the offer and sought help from Canada's foreign affairs department.

Spokesperson Ambra Dickie said the department is aware of the case but refused to give details, citing the Privacy Act. She did say that under Chinese law a detainee cannot make or receive calls, and visitors are banned except for lawyers and consulate officials.

Chen's detention follows that of another Canadian citizen, Huseyin Celil, 38, a Burlington imam who was arrested last March in Uzbekistan and extradited to China on charges of alleged terrorism, stemming from his political activities on behalf of China's Uyghur minority in the mid-1990s. In that case, Chinese officials have refused to recognize Celil's rights as a dual citizen.

In an Angus Reid survey of 1,175 Canadians released yesterday, 74 per cent believed the Canadian government should more aggressively protest the treatment of Celil and publicly condemn China's action; 72 per cent said Canada must place more emphasis on China's human rights and minority rights, ahead of its economic interests in the country.

According to the foreign affairs department's information booklet for Canadian travellers, when legal issues arise, consular officials do not: intervene in private legal matters; provide legal advice; post bail, fines or fees; get citizens out of jail; take possession of an abducted child; investigate a crime or death; or ask local authorities to give preferential treatment to Canadians.

"Your Canadian citizenship offers no immunity," the 29-page advisory warns.

"Never assume that the legal system of another country is the same as at home. `Innocent until proven guilty' is not a universal principle."

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