Kevin O’Leary warns TikTok’s fate could be determined by ‘secret golden share’ granting Beijing ‘veto’ power

The fate of TikTok could be left to Beijing thanks to a “secret” deal giving the Chinese government leverage over any potential deal involving the platform, “Shark Tank” investor Kevin O’ told FOX Business on Monday Leary.

“There is something called a secret golden share that every Chinese company must issue to the CCP leadership. It’s Xi. [Jinping] himself, and it turns out ByteDance can’t negotiate anything unless he makes a decision,” O’Leary Ventures president told “Mornings with Maria” guest host Cheryl Casone.

“The secret share constitutes a right of veto over all other shareholders,” he explained. “They have no rights once the covert action has been issued, so now we’re wondering what to do with the covert action, because until it decides what’s going to happen, it doesn’t matter what what the shareholders or the CEO or any member of management thinks, it doesn’t matter. It’s the secret golden share that now determines the fate of TikTok.

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As The New York Times explainedin this arrangement, “the Chinese government buys a small portion of a company’s equity in exchange for a seat on the board of directors and veto power over certain company decisions.”

Speaking on the subject later on “Varney & Co.”, O’Leary said the news might surprise other investors involved in Chinese companies.

“They’re all subject to the secret golden stock holder, and I think that violates some U.S. securities laws, if you’re listed on a New York Stock Exchange, NASDAQ or any other exchange,” he said. he declared.

“The rumor is going around today here in Washington that Lindsey [Graham]…we will be launching a bill on this very soon because we are learning so much from this TikTok situation. There is no agreement yet. This deal is now in Trump’s hands and it will be his deal. Unfortunately, the possibility of extending the 90-day deadline is not currently included in the current law. So this will have to be changed by Congress. And the option of having any Chinese ownership is not permitted by the Supreme Court’s 9-0 order. So…our hands are tied as buyers, and we’re going to have to follow the law unless President Trump can change it. »

TikTok, however, stated conversely that “an entity affiliated with the Chinese government owns 1% of a subsidiary of ByteDance, Douyin Information Service”, and asserts that this stake “has no impact on the global operations of ByteDance in outside China, including TikTok.” according to Reuters.

The popular short video platform went dark for millions of users across the United States on Saturday evening after the Supreme Court, citing national security concerns, upheld a bipartisan law signed by President Biden in the spring latest which required the app’s China-based parent company, ByteDance, to sell the platform or face a US ban.

While briefly going dark, the app featured a shout-out to Trump, who previously said he would “most likely” grant TikTok a 90-day extension from Sunday’s deadline after he takes office.

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TikTok informed its users on Saturday that it was no longer available due to the ban adopted in the United States, while claiming that President-elect Trump was working on a solution. (TikTok/Fox News)

The app returned a few hours later, but its future remains uncertain.

Just minutes after the Supreme Court’s ruling, O’Leary presented a $20 billion cash offer for the app, arguing that selling to a U.S. union was the “obvious solution.”

He told Casone that he had no negotiations with ByteDance thanks to the “golden share.”

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Alexandra Koch, Bradford Betz and Landon Mion of Reuters and FOX Business contributed to this report.