Is TikTok a Trojan horse for Beijing’s wrongful collection of private data and a threat to national security? Or is it a scapegoat for the Chinese-American conflict and a sacrificial victim of Washington’s anti-Chinese paranoia? The real sin of the platform, enjoyed by 150 million Americans, seems to lie in a change of governance, the latest incident of which did not fail to attract the attention of many Western countries’ governments.
Indeed, the app’s parent company ByteDance has carried out a very discreet series of ownership changes, resulting in a complex shareholder structure behind which looms the shadow of the Chinese Communist Party (CCP). It all started on April 30, 2021, when three Chinese state-owned companies, including the Cyberspace Administration of China (the powerful internet regulator), acquired 1% of ByteDance Limited’s shares, for the paltry price of 2 million yuan (€270,000), and obtained one of the three seats on the board of directors, with veto power.
The board member thus parachuted in was none other than Wu Shugang, a CCP executive known for having declared on Weibo – China’s Twitter – in 2012 that “the devil takes away human rights and freedom!” The message has since been deleted. On the same day, the firm’s share capital was increased by 1,900%, reaching 200 million yuan (€27 million). The second incident came on May 20, 2021, when Zhang Yiming, the founder of ByteDance and age just 38, resigned as CEO. He has lived in Singapore since the beginning of 2022.
The third part to the story happened on January 18, when the very same Yiming sold his 98.81% stake in ByteDance – renamed Douyin as of May 2022 – to an obscure company, Xiamen Xingchen Qidian Technology (XXQT), which had been created just 20 days earlier, on December 30, 2022.
Chinese media wondered how a tiny mouse with a registered capital of 1 million yuan (€130,000) could consume a global giant with a value close to $200 billion (€183 billion). But no one has dared to break the omerta surrounding the two shareholders of XXQT: There is no information about them officially, except their names. All that is known is that they each own 50% of the mysterious company founded in Xiamen, a city where the young Xi Jinping was vice mayor from 1985 to 1988, before building his political rise from Fujian province.
Sophisticated legal structure
In the latest episode, XXQT gave all of its shares on the same day as collateral to a subsidiary of ByteDance in Hong Kong. Rumors then circulated in financial circles that the group would be imminently listed on the Hong Kong Stock Exchange. Since April 2018, it has allowed the trading of multiple voting shares, a practice contrary to the principle of “one share, one vote,” but favored by offshore Chinese companies.
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