China's government expands its use of 'golden shares'
15.12.2021, 23:26

China's government expands its use of 'golden shares'

Early Thursday morning in Asia, Reuters quoted anonymous sources to confirm the Chinese government’s rush to control the firms holding key data.

“The Chinese government has been expanding its practice of taking minority stakes in private companies beyond those specializing in online news and content to firms possessing large amounts of key data,” said the news.

The news also said that the government has already made a de facto special management stake or "golden share" arrangement with Full Truck Alliance Co Ltd, a Chinese platform arranging trucking services.

Reuters also mentioned that a third source with direct knowledge of the matter said, “Didi Global Inc has also been in talks about a golden share for its core ride-hailing business.”

Key quotes

Seeking influence, Beijing began taking golden shares in private online media companies - usually about 1% of a firm - some five years ago.

The stakes are bought by government-backed funds or companies which gain a board seat and/or veto rights for key business decisions.

A separate source said a golden share had been taken in a data-rich company very recently but declined to disclose which one.

Reuters was not able to ascertain how many other data-rich firms authorities were seeking to take a golden share in.

Fx implications

The news is negative for the market’s risk appetite but failed to stop the S&P 500 Futures from tracking the Wall Street benchmarks, up 0.20% intraday around 4,720 by the press time.

Read: Forex Today: Fed delivered as expected, stocks rallied on relief

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