A research report revealed that the owner of Huawei is unknown and that the company is owned by a Chinese trade commission that may be governed by the Chinese government.
The United States has many times accused Huawei of espionage for the Chinese government, the country has never put one piece of evidence on the table to support those statements.
The country has banned Chinese giant in the USA and is trying to convince allies to do the same. As a result, European countries are now conducting a study to determine whether or not Huawei will be banned from constructing a 5G network.
Now a bomb may have fallen because a report from George Washington University and Fulbright University Vietnam reveals that Huawei is not owned by a private sector owner as the company has always claimed. Huawei is part of a holding company called ‘Huawei Investment & Holding Co. Ltd’, which is 99 percent owned by a Chinese trade commission.
Chinese Trade Commission
Ren Zhenfei is known as the founder of Huawei, but he owns only 1.14 percent of the shares of the holding which is, for the most part, held by Huawei Investment & Holding Company Trade Union. The latter is a Chinese trade commission. The report further states that the leadership of a trade commission in China is not elected by its own management, but by a superior trade commission.
It is also important that if the holding of which Huawei is a part were dissolved, the shareholders, in particular, Ren Zhenfei, would not be entitled to their share of the capital, precisely because the holding is managed by a trade commission. In that case, the capital of the company also goes to the superior trade commission.
Possession Of The Chinese Government
Huawei, therefore, consists of a complex business structure, but the report goes even further. The unknown, superior trade commission that appoints the policymakers of the trade commission that owns the holding of which Huawei is a part, is in turn controlled by an even higher commission. According to the researchers, that structure goes all the way to the All-China Federation of Trade Unions, which is under the control of the Communist Party of China.
The research report explains that: “If we take into account what is known about the way trade commissions in China work, and if the business structure with regard to the trade association is correct then we consider that Huawei is in fact owned by the state “
Huawei Denies The Allegations
Huawei has already responded to Technode‘s report and stated that “it is based on unreliable sources and speculations, without the facts being understood”. Huawei states that its trade union does itself appoint representatives who function as the company’s most important policy body. They are elected by the shareholders.
Previously, Huawei stated in its 2018 annual report that it is a private company owned by its employees. The trade annual trade report explains, “The Union of Huawei Investment & Holding Co., Ltd works with a shareholder structure that consists of 96,768 employees as shareholders. That structure is limited to employees. No government agency or other organization owns shares of Huawei.”
Effects of This Report
For the time being it is only one investigation report that openly disputes that Huawei is a private company and states that it is accountable to the Chinese government indirectly due to a complicated tangle of business structure. Huawei also denies the allegations in the investigation. Now it remains to be seen what the reactions will be to this report.