Huawei pushes back on reports of government ties, claims employee ownership

TechCrunch | 4/25/2019 | Staff
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Huawei’s controversial status in North America and Europe stems from a lot of different factors. At the heart of most of them, however, is the hardware maker’s alleged ties to the Chinese government. The notion of government control has been enough to cause something approaching an outright ban on its products in the States, over worries that handsets and networking equipment could be used to spy on the U.S. government and its citizens.

A recently published report from professors at Fulbright University Vietnam and George Washington University Law School resurfaced those issues. The simply titled “Who Owns Huawei?” attempts to get to the bottom of who is controlling the rapidly ascending smartphone maker. The results published struggle to draw a clear conclusion on the matter, though the authors note in the summary, “Regardless of who, in a practical sense, owns and controls Huawei, it is clear that the employees do not.”

Huawei - Press - Call - Week - Attempt

Huawei held a press call this week in an attempt to clarify some of that confusion, and the results were, well, also pretty confusing. The company provided TechCrunch with a transcript of the remarks by Chief Secretary of its Board of Directors, Jiang Xisheng. Jiang explained that, contrary to reports, Huawei is “wholly owned by its employees.”

The executive is referring to Huawei’s labor union. Under the plan, employees control 99 percent of the company’s “virtual restricted shares.” The executive explains the structure thusly:

China - Liability - Company - Shareholders - Stock

In China, a limited liability company can have up to 50 registered shareholders. A non-listed stock corporation can have up to 200 registered shareholders. At Huawei, we have way more than 50 or 200 shareholding employees, so they cannot be registered as Huawei’s shareholders. This is true for Huawei as a...
(Excerpt) Read more at: TechCrunch
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