A would-be Chinese immigrant businesswoman is suing a troubled BC Cancer Agency spinoff company after a board member allegedly defrauded her out of more than $200,000 by promising to help fast-track her immigration application under the Provincial Nominee Program.
In two lawsuits filed a year apart, plaintiff Yaping Lai claims in BC Supreme Court that Kuen Yu “Joseph” Kwok, a self-described “prominent businessman and a director of several notable companies, including Perceptronix Medical Inc.” defrauded her out of more than $200,000 in connection with her bid to immigrate to Canada.
Perceptronix was spun off from the BC Cancer Agency in 1999 to commercialize automated cancer-screening technology. Lai claims she lives and works in China and speaks no English. She claims she signed two deals with Kwok in February 2014, one worth $420,000 for Kwok handling her immigration application, and another worth $1 million for shares in Perceptronix.
According to the lawsuit, Kwok told her the share purchase “was a requirement for the immigration application, to allow the plaintiff to qualify as an investor” under the Provincial Nominee Program.
Lai claims Kwok touted a “close relationship with a senior Citizenship and Immigration Canada (CIC) officer which allowed him to have exceptional success in obtaining immigration approval for his clients ... without requiring the submission of the complex documents and procedures that other immigration applicants must submit.”
Lai claims she paid an instalment of about $200,000 to a Chinese bank account owned by Kwok in March 2014, and was “pressured” to pay the share purchase price because of an “immigration quota” that was about to “disappear.”
“The plaintiff became suspicious, and investigated with a friend who had resided in Canada for several years. Through this friend, the plaintiff learned that the Statements and the Quota Statement were all untrue,” the claim states.
Kwok allegedly refused to return the money and cancel the agreements because “the money was already paid to the senior CIC immigration officer and he could not get it back.”
Zachary Ng, Lai’s lawyer, told Business in Vancouver via email that “Ms. Lai is currently pursuing legal remedies against Joseph Kwok and others. We have no plans to settle at this time,” but would not elaborate or agree to an interview.
Kwok, who did not respond to multiple requests for comment, denies defrauding Lai, claiming in his legal response that the only agreement was for shares in Perceptronix, which she allegedly failed to pay for in full.
Kwok’s biography has been scrubbed from Perceptronix’s website, and the company’s chairman, former premier Mike Harcourt, told BIV back in April that he didn’t know why the bio was removed, but that he and the company knew about the lawsuit.
“I’m aware of the lawsuit, but it’s a personal lawsuit against Joseph,” Harcourt said in phone interview, adding that it was too early on in the process to comment.
The former lawyer said the company was getting ready to commercialize and introduce its technology, though it hadn’t put out a press release on its website since 2012.
“I haven’t looked at the website because we haven’t had the funds to maintain it for four years, and we haven’t had a need to,” Harcourt said. (Sometime after the interview, Perceptronix posted several backdated press releases from 2015 and 2016, though cached snapshots of the page show they were posted well after their listed dates.)
The company was not listed as a defendant in Lai’s original lawsuit, but is listed in an August 2 notice of civil claim, along with Kwok’s other vehicle, Tincy Investments Inc. Perceptronix has not filed a response to the lawsuit, and its website has been taken down.
Harcourt said he wouldn’t pass judgment on personal litigation against a member of his company’s board.
“A private lawsuit between Ms. Lai and Joseph, which has not even seen discovery yet, which has not even been to court yet, is simply that, a started lawsuit,” he said. “I’ll cross that bridge when we get to it.”
Harcourt said he was appointed about four years ago after the death of the company’s founders, philanthropist Milton Wong and venture capitalist Donald Rix.
“We’re going to carry on with the development of this fine company, started by Milton Wong and Don Rix and a number of other prominent British Columbians, whose families asked me to help the company after the two of them died of cancer,” he said. “Until this lawsuit gets to a point where there is a decision, I’m focused on my obligation to the families that asked me to help this company through to become a commercial success. So that’s my focus.”
Dr. Simon Sutcliffe, a former Perceptronix board member and former head of the BC Cancer Agency, left the company in 2009. He told BIV in a phone interview that Perceptronix faced many challenges up until he cut ties.
“The challenge always for Perceptronix was whether the technology was actually at the forefront of where the field was and was going to be,” he said, adding that financing and the commercial viability of the company’s “automated quantitative cytology” technology was questionable.
He cut ties with the company in 2009 when he felt his role becoming “irrelevant.”
“Essentially the company wasn’t really going anywhere,” he said. “My role to such companies really is I give useful advice around the science, the technology and the implications for future health care, and it was becoming increasingly less relevant to have me as part of those discussions.”
Perceptronix has also had a revolving door of leadership, and is no stranger to litigation.
The company’s former CEO, Dr. Bojana Turic, obtained a default judgment against Perceptronix in April 2015 for unpaid pension entitlements of more than $187,000. Turic declined to comment for this story.
Kwok, who has donated more than $17,000 to the BC Liberals since 2014 and holds an engineering degree from the University of British Columbia, is also facing multiple lawsuits connected to the bankruptcy of Viceroy Homes. Kwok accompanied the B.C. government’s trade mission to Guangzhou province last November for Viceroy, but a spokesman, who initially refused to confirm Kwok’s participation, stated in an email that Kwok made his own travel arrangements.
For Sutcliffe, the recent sale of Celator Pharmaceuticals to Ireland’s Jazz Pharmaceuticals for $1.5 billion showed that “there were clearly good models” for cancer agency spinoffs, noting that Celator was the first to do so. He doesn’t know when the company moved from its original offices on Broadway to its current address inside the Cambie Street Surgery Centre, and much time has passed since he was involved.
“It would’ve been hoped that Perceptronix would’ve been that kind of model,” he said, adding that the office move “does raise questions as to what the business model is now. Clearly, a lot of water’s gone under the bridge since I left the ship.”
