Tencent Says Its Inclusion on US List of Firms Allegedly Aiding China's Military Is Mistake; Shares Sink(Yicai) Jan. 7 -- Tencent Holdings said that the US Department of Defence has made a mistake by adding the Chinese internet giant to a list of firms allegedly working with China's military. The company's shares declined.
"Tencent being on this list is a mistake, and we are neither a military company nor a military supplier," the Shenzhen-based company told Yicai today. "We will still work with the relevant US authorities to resolve the misunderstanding.
"Unlike export controls or otherwise, this list has no impact on our business," Tencent noted.
Shares of Tencent [HKG: 0700] plunged 7.1 percent to HKD380.20 (USD48.92) apiece as of 1.15 p.m. in Hong Kong today. Its over-the-counter stock [OTCM: TCEHY] closed 7.8 percent lower at USD49.01 yesterday.
The Department of Defense released the latest version of its annually updated "Chinese military companies" list, formally mandated under US law as the "Section 1260H list," on the Federal Register yesterday. It designated 134 Chinese firms, including Tencent, battery giant Contemporary Amperex Technology, chip makers ChangXin Memory Technologies and Yangtze Memory Technologies, Huawei Technologies, Semiconductor Manufacturing International, 360 Security Technology, China Mobile, China Unicom, and life sciences firm BGI Group.
According to the relevant provisions of the National Defense Authorization Act for Fiscal Year 2024, entities included in the list may be subject to relevant entity or goods and services bans, including prohibition from the Department of Defense from signing, renewing, or extending contracts for goods, services, or tech with companies on the list or controllers and restrictions on cooperation between other entities that have trade relations with the department and firms on the list. Normal business partnerships will also be affected to some extent.
Six Chinese companies were removed from the list, including AI firm Megvii, China Railway Construction, China Marine Information Electronics, China State Construction Engineering, and Covestro.
Editor: Martin Kadiev
