Chinese telecom firm seeks stay of federal divestment order security concerns

OTTAWA — A state-owned Chinese telecommunications firm is asking a judge to pause a federal order to divest its stake in a Canadian subsidiary over national security concerns while broader arguments play out in court.

At a Federal Court hearing today, a lawyer representing the company argues a temporary stay is warranted to prevent irreparable harm to China Mobile International Canada.

In January, the federal government informed CMI Canada of a review on security grounds, saying the investment could result in the Canadian business being leveraged by the Chinese state for foreign interference and the compromise of critical infrastructure.

The government issued an order in August directing parent company China Mobile to either divest itself entirely of — or wind up — the Canadian business within 90 days, though an extension has since been granted.

CMI Canada says the government has no grounds to believe the company would compromise security or engage in espionage on behalf of Beijing.

The government argues for maintaining the order while the application for judicial review proceeds, saying a stay would pose an unacceptable risk to national security.

This report by The Canadian Press was first published Nov. 24, 2021.

The Canadian Press