The last time the United States took control of some of influential Chinese companies, especially Huawei, are not only limiting the latter access to its market, but also forcing the allies to buy equipment from a Chinese manufacturer. We keep hearing accusations of close links Huawei with the Chinese government. A recently published research paper which examines the ownership structure of Huawei, seeks to refute the claim of the company that it is owned by the employees. It is reported that the identities of the actual owners are unknown, and they can be considered as the Chinese government.
The authors of the report were made by Donald Clark (Donald Clarke) from George Washington University and Christopher balding (Balding, Christopher) from the University Fulbright in Vietnam. It States that Huawei is fully owned by the holding company, 99% shares of which is owned by the trade Union Committee. If the organization is a typical Chinese trade Union Committee, that, according to the authors, may indicate that the telecommunication giant owned by the government and controlled by them.
In accordance with the report published on the research platform Social Science Research Network (SSRN), Union leaders in China are not elected and not accountable to the workers. On the contrary, they owe their loyalty to the higher trade-Union organizations, up to the all-China Federation of trade unions, which is controlled by the Communist party, and its leader is included in the Politburo, the highest political body of the ruling party of China.
“Given the public nature of the trade unions in China, if the share in the ownership of the trade Union Committee is real and if the Union of Huawei and its Committee operate as ordinary Chinese trade unions, the company can be considered as essentially belonging to the state”, – said in the document.
The report said that the allegations about the ownership of Huawei employees is not true, because employees of the company, according to Chinese law, have no control over the decisions of trade unions. Workers allegedly own “virtual shares”, which do not give the right to vote and allowed to participate only in the scheme of distribution of profits, and this right is lost when a person leaves the company.
In a statement, Huawei in the request for the resource TechNode was told that the document is based on unreliable sources and assumptions made without understanding the totality of the facts. The company added that its trade Union performs the duties and exercises the rights of shareholders through the Board of representatives, which is the highest decision-making body Huawei. The members of the Board of representatives are elected by the shareholders entitled to vote. “They are not accountable to any state body or political party, and they are not obliged to do”, – said the company.
In its financial report for the 2018 Huawei on the background of the problems the US has stated that it is a company fully owned by its employees – this statement has become a mainstay in the defense against recent allegations by the American government about the potential impact on the company of the Chinese authorities. The ownership structure of Huawei was established as a scheme of workers owning shares, and it is now involved 96 768 shareholders. The company said in the report that no government Agency or foreign entity owns the shares of Huawei.
The property has become a sensitive topic for the telecommunications giant after the ban of the US government for the supply of Huawei equipment on the grounds that the latter may be used by the Chinese government for espionage.