The Chinese government has acquired stakes in Chinese companies owned by technology companies ByteDance and Sina Weibo, according to company records, amid increasing regulatory action against the industry.
News of the missions and seat on the board was first released on Monday by The Information.
WangTouZhongWen (Beijing) Technology, which is owned by three Chinese government entities, including a fund backed by China’s premier internet watchdog, holds a 1 percent stake in Beijing ByteDance Technology, according to shareholder data from the National Enterprise Credit Information Publicity System .
The stake gives Beijing a board seat at the subsidiary that holds some of the business licenses to Douyin and Toutiao, some of ByteDance’s most popular domestic apps, a source familiar with the matter said.
The Chinese government has no stake in the company’s successful TikTok short video app, the source said. TikTok is not available in China.
The Chinese subsidiary “only relates to some of ByteDance’s video and information platforms in the Chinese market and holds some of the licenses they need to operate under local law,” a ByteDance spokesman told Reuters on Monday.
A subsidiary, WangTouTongDa (Beijing) Technology, also owns a 1 percent stake in Beijing Weimeng Technology, Weibo’s main domestic subsidiary, according to a separate government data report and filings it has filed with the US Securities and Exchange Commission.
Weibo did not immediately respond to a request for comment. The SEC filing stated that his unit received the investment from WangTouTongDa in April 2020 and that WangTouTongDa (Beijing) Technology had the right to appoint a director to Weiming’s three-person board of directors.
According to company information app Tianyancha, the ByteDance unit’s share transfer was registered on April 30, 2021.
Despite Chinese regulators cracking down on a number of sectors, the technology has taken some of the toughest measures yet.
Regulators say they are concerned about issues ranging from the market power of their tech giants to how they manage user data, and have launched antitrust investigations, canceled deals and released new guidance for the sector.
WangTouZhongWen (Beijing) Technology is owned by the China Internet Investment Fund, a subsidiary of China National Radio, and the Beijing Cultural Investment Development Group, according to the company’s registration.
China Internet Investment Fund, established by the Cyberspace Administration of China and the country’s Ministry of Finance, wholly owns WangTouTongDa (Beijing) Technology.
© Thomson Reuters 2021