Corporate records show that the Chinese government has stakes in Chinese entities owned by ByteDance and Sina Weibo. The news comes midst widening regulatory crackdown on the industry.
Shareholder data from the National Enterprise Credit Information Publicity System shows WangTouZhongWen (Beijing) Technology, owned by three Chinese state companies including a fund backed by China’s main internet watchdog, has a 1% stake in Beijing ByteDance Technology.
That stake provides Beijing a seat at the board at the subsidiary which holds some of the business licenses covering Toutiao and Douyin, ByteDance’s most popular domestic apps, said a source familiar with the matter at hand. However it does not give the Chinese government any stake in the company’s short video app TikTok, said the source.
Incidentally, TikTok, which has been accused of harvesting user data in the United States, is not available in China.
The Chinese subsidiary “only relates to some of ByteDance’s China-market video and information platforms, and holds some of the licenses they require to operate under local law,” said ByteDance’s spokesperson.
According to a regulatory filing made to the SEC, WangTouTongDa (Beijing) Technology, has a 1% stake in Weibo’s main domestic subsidiary – Beijing Weimeng Technology.
Weibo did not immediately respond to a request for comment.
In its SEC filing, Weibo said its 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-member board.
According to corporate information app Tianyancha, the stake transfer to ByteDance’s unit was registered on April 30, 2021.
Regulators are concerned on a range of issues including management of user data.
Company registration filing shows WangTouZhongWen (Beijing) Technology is co-owned by the China Internet Investment Fund, a subsidiary of China National Radio and the Beijing Cultural Investment Development Group.
The China Internet Investment Fund, which was established by the Cyberspace Administration of China and the country’s finance ministry, fully owns WangTouTongDa (Beijing) Technology.