Kevin O’Leary warns TikTok’s fate could be decided by ‘secret gold quota’ that gives Beijing ‘veto’ power

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

“There is something called a secret golden share that a Chinese company must issue to the leadership of the CCP. That is Xi [Jinping] himself, and it turns out that ByteDance can’t negotiate anything without him making a decision,” O’Leary Ventures Chairman told “Mornings with Maria” guest host Cheryl Casone.

“A secret share is veto power over all other shareholders,” he explained. “They have no rights when the secret has been released, now we are faced with what to do with the secret because until he is the one who decides what will happen, it does not matter what the shareholders think or the CEO. any of the managers, it doesn’t matter The secret gold allocation that decides the fate of TikTok now.

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As the New York Times explained, in this process, “the Chinese government buys a small portion of the company’s capital in exchange for a seat on its board and veto power over certain company decisions.”

Speaking on the matter later on “Varney & Co.,” O’Leary said the news may surprise some investors involved in Chinese companies.

“They’re all under a private gold shareholder, and I would think that’s against certain US securities laws, if you’re listed on the New York exchange or NASDAQ or any other exchange,” he said.

“The rumor has it today, here in Washington, that Lindsey [Graham]… we will introduce a bill on this very soon because we are learning a lot about this TikTok situation. There is no agreement yet. This deal is now in Trump’s hands and it will be his deal. Unfortunately, the 90-day extension option is not in the current law. So that would have to be changed by Congress. And the option of having a Chinese identity was denied by the Supreme Court’s 9 to 0 ruling. Our hands are tied as consumers, and we will have to abide by the law unless President Trump can change it. “

TikTok says to the contrary, however, that, “a Chinese government-affiliated entity owns 1% of ByteDance’s subsidiary, Douyin Information Service,” and says the holding “is irrelevant to ByteDance’s global operations outside of China, including and TikTok,” according to Reuters.

The popular short video platform went dark for millions of users across the US late Saturday after the Supreme Court, citing national security concerns, upheld a bipartisan law signed by President Biden last spring that required its China-based parent company, ByteDance, to sell. platform or face a US ban.

While briefly blacked out, the app featured a shout-out to Trump, who had said he was “very likely” to give TikTok a 90-day extension from Sunday’s deadline after taking office.

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The app returned hours later, but its future remains in limbo.

Minutes after the Supreme Court decision, O’Leary put $20 billion in cash on the table, arguing that selling to an American corporation was “the obvious solution.”

He told Casone that he had no discussions with ByteDance because of the “golden share.”

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