Fall of a Howe Street tech-darling, Istuary Innovations
By Dermod Travis
Istuary Innovations is back in the news this month and not for particularly good reasons.
Founded by Sun Yian, Istuary rolled into B.C. or out of a downtown Vancouver Starbucks – depending upon your perspective – in 2013.
Sun – who goes by the name Ethan – his wife Yulan Hu, and nine associates at Istuary are facing yet another lawsuit, this time – as the CBC reported – by 27 investors claiming that they “committed immigration and business fraud.”
As Business in Vancouver noted the lawsuit alleges that “Sun used pictures with politicians including (former premier) Christy Clark and (Prime Minister) Justin Trudeau as props in presentations where he quickly moved to solicit funds from the public, first targeting the Vancouver-based fellow ethnic Chinese community, the Plaintiffs, and other Chinese in China seeking to migrate to Canada for greener pastures.”
Much of Istuary’s promotional efforts included those photos, many of which were taken during the signing of memorandums of understanding (MOUs) on trade missions with Trudeau or Clark.
MOUs were never in short supply when it came to Istuary.
Following a trade mission to China in the fall of 2015, Sun received a handwritten note from Clark that read, “I was delighted to be a part of your many MOU signings in China and am grateful for your generous support of our mission. It’s great to watch your company grow and thrive.”
In fact, all three levels of government rolled out the red carpet for Sun, but seemingly did so without much in the way of due diligence.
It’s likely tougher to get a credit card than it was for Sun to get government officials to sing his praises.
Ian McKay, then-CEO of the Vancouver Economic Commission, was an early fan.
Just a few months after emerging from that Vancouver Starbucks, Sun accompanied McKay and Vancouver mayor Gregor Robertson on a trade mission to China, where a MOU was signed between Shanxi Zhongdianhuashen and Istuary to “establish a research and incubation partnership.”
McKay has since been appointed CEO of the federal government’s Invest in Canada office.
The since-shuttered HQ Vancouver was also an early booster of Istuary within Vancouver’s business community. In 2015, the organization issued a news release congratulating the firm on its plans for expansion in Vancouver.
In December 2015, HQ Vancouver’s then-president, Yuen Pau Woo, toured Istuary’s Vancouver offices and tweeted that it was an HQ Vancouver “success story with room to grow.”
You wouldn’t know it from its website today, but Mitacs – a national research organization based at the University of B.C. – partnered with Istuary on at least three projects, including one which was an “investigation on object recognition on very large volumes of image data” and another on “video image searching.”
As The New York Times reported this summer, “an Istuary customer presentation highlighted the services its technology could offer in Chinese cities. They included the ability to recognize faces through security cameras and run them through databases, as well as track people’s personal relationships. It also highlighted other services, like tracking crowds and land records.”
Human rights organizations, including Amnesty International, have been highly critical of the Chinese government’s invasive surveillance efforts of its citizens.
By May 2017, Istuary had been approved by the federal government as “a business incubator” under the federal government’s start-up visa pilot program.
Then the house of cards began to crumble.
Payrolls were missed and by the summer of 2017, Sun had fled to China. He hasn’t returned since.
Left behind in Istuary’s wake $3 million in unpaid wages, tarnished reputations for the Vancouver Economic Commission, HQ Vancouver (before it closed), Mitacs and officials with both the provincial and federal governments.
Everyone might have saved some face with a modicum of research – call it due diligence – into Sun and his background.
Prior to arriving in Vancouver, Sun had filed for bankruptcy, something China Daily reported on in 2015, and something you’ll hear Sun admit to on a video posted to YouTube.
As The Times reported, Sun also didn’t disclose that he had founded Kuang’en Network Technologies, a cybersecurity company in Beijing in 2014. It has alsosince closed.
Sun will likely think twice about returning to B.C., after all Employment Standards fined Istuary $500 for its failure to pay its employees.
Dermod Travis is the executive director of IntegrityBC.
