Ottawa Orders China Mobile to Divest Share in Its Canadian Subsidiary CMI Canda

Ottawa has ordered China Mobile International to divest its shares in the Canadian subsidiary China Mobile International Canada (CMI Canada) or terminate its business out of consideration for the national security.

Out of consideration for national security, Ottawa has ordered a Chinese Communist Party state-owned telecommunications company to divest its shares in its Canadian subsidiary CMI or terminate its business, reads a new report from The Globe and Mail. The company is trying to challenge government orders through legal channels.

In a document outlining its concerns, the federal government stated that “since the investor is a state-owned company ultimately controlled by the Chinese state, this investment could result in the Canadian company being exploited by the investor’s ultimate controller for non-commercial purposes, such as compromising critical infrastructure and foreign interference, to the detriment of Canada’s national security,” explains the report.

CMI Canada is requesting a decision from a government official, claiming that the government has no reason to believe that the company will harm national security or engage in corporate activities on behalf of CCP Beijing. The company’s application to the Federal Court last week disclosed the details of the federal government’s review of the investment.

The Chinese-funded company was established in 2015 to provide mobile communication services in Canada, including pre-paid phone plans, but it does not own or operate any telecommunications network facilities.

A spokesperson for Innovation, Science and Economic Development of Canada said all foreign investments are subject to national security review under the Investment Canada Act. “Reviews are conducted on a case-by-case basis as part of a rigorous and evidence-based process,” Hans Parmar said. “Due to the confidentiality provisions of the Investment Canada Act, no other comment can be made at this time.

Learn more over at the (paywalled) report from The Globe and Mail.