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

TikTok’s fate may rest with Beijing thanks to a “secret” arrangement 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 every Chinese company must issue to the CCP leadership. It is Xi. [Jinping] himself, and it turns out that ByteDance can’t negotiate anything until it makes a decision,” said the president of O’Leary Ventures. “Mornings with Maria” guest host Cheryl Cazone.

“Secret share is a right of veto over all other shareholders,” he explained. “They don’t have any rights after the secret stock is issued, so now we’re dealing with what to do with the secret stock, because until he decides what’s going to happen, it doesn’t matter what the shareholders or the CEO think, or that.” irrelevant, it’s the secret golden ratio that determines TikTok’s fate.”

KEVIN O’LEARY HAS PLACED A $20 BILLION TIKTOK CASH OFFER ON THE TABLE.

Kevin O’Leary, president of O’Leary Ventures, discussed TikTok’s uncertain future during an appearance on “Mornings with Maria” on Monday. (Ting Shen/Bloomberg via Getty Images/Getty Images)

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

Speaking later on the subject at Varney & Co., O’Leary said the news may come as a surprise to other investors involved with Chinese companies.

“They’re all subject to a secret golden share holder, and I think that’s against some of the US securities laws if you’re listed on the New York Stock Exchange or the NASDAQ or any other exchange,” he said.

“There’s a rumor in Washington today that Lindsay [Graham]… we will introduce a bill on this very soon because we are learning a lot from this TikTok situation. This deal is now in Trump’s hands and it will be his deal. Unfortunately, there is no option to extend 90 days in the current law. So that has to be changed by Congress. And the option to have Chinese ownership is not allowed by the 9 to 0 Supreme Court decision. So … our hands are tied as buyers, and we’re going to have to obey the law until President Trump can change it.”

However, TikTok, in contrast, said that “an entity affiliated with the Chinese government owns 1% of ByteDance subsidiary Douyin Information Service” and said the holding has “no influence on ByteDance outside of China.” on its global operations, including TikTok.” Reuters reports.

Popular short video platform went dark for millions of users Late Saturday, the U.S. Supreme Court, citing national security concerns, upheld a bipartisan law signed by President Biden last spring that required the app’s Chinese parent company, ByteDance, to sell the platform or face a U.S. ban.

When it briefly went dark, the app gave a shout-out to Trump, who had previously said he would “most likely” give TikTok a 90-day extension beyond Sunday’s deadline after taking office.

PRIVACY GROUPS, EXPERTS, PARENTS PRAISE SCOTUS TICKETS BAN WHILE SAYING OTHER DECISION ‘UNDEMOCRATIC’

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

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

Just minutes after the Supreme Court ruling, O’Leary tabled a $20 billion cash offer for the app, arguing that selling to a US syndicate was the “obvious solution.”

He told Kazon that he did not negotiate with ByteDance because of the “golden share”.

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