There is an apparent discrepancy about the details of the deal that as struck between the Chinese tech company ByteDance an American companies Oracle and Walmart over the divestment of the Chinese firm owned short video sharing app TikTok with both parties issuing conflicting statements on the matter on Monday.
The two American companies had said over the week end that they had reached an agreement with ByteDance to take a stock in a new company called TikTok Global in order to try and convince United States president Donald Trump not to ban the app in the country.
But the conflicting statements issued by the two parties now cast a doubt over the fate of the app in the US and the preliminary blessing of the agreement as was accorded by Trump.
On Friday last week, the US Commerce Department had said that new downloads and updates to short video sharing app, which is popular in the US, would be blocked which has made China’s ByteDance to race to avoid a crackdown on its app. If the deal is successful in appeasing Trump, the threat to shut down the app could be avoided and would also give a an opportunity for Trump to avoid alienating any young users of the app prior to the 3 November US Presidential election.
On Monday, ByteDance said that 80 per cent of the new company TikTok Global, which is essentially a US company that will own most of the app’s operations globally, will be owned by it. The Chinese tech firm also added that the nee company would become its subsidiary and a public offering of shares would be launched by TikTok Global in order to enhance the corporate governance structure as well as the transparency for the new company.
Stakes of 12.5 per cent and 7.5 percent in TikTok Global would be taken up by Oracle and Walmart respectively, the two companies had said in a joint statement on Saturday. The two companies also said that US investors, including the two companies, would hold majority share of the new company. And on Monday, Oracle said that the ownership of ByteDance in TikTok would also be distributed among investors of the Chinese firm and that the Beijing-based company would have no stake in TikTok Global.
ByteDance was given a time frame of 90 days to relinquish ownership of TikTok by an executive order that was signed by Trump on 14 August.
According to the details of the deal as provided by Oracle, ByteDance would be meeting that executive order. But if ByteDance’s account of the deal is accepted, it would be a policy reversal for Trump.
In response to the conflicting deal details, the White House on Monday referred to a Fox News interview in which Trump had said that total control over TikTok will be at the hands of Oracle and Walmart. “If we find that they don’t have total control, then we’re not going to approve the deal,” Trump said.
(Adapted from LiveMint.com)