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Zhang Feng has been investigated for alleged unauthorized sharing of personal data collected by WeChat to an ex-official

An executive at Tencent Holdings Ltd. TCEHY -0.04% , China’s most valuable publicly listed company, has been held by Chinese authorities, part of a probe into a high-profile corruption case involving one of the country’s former top law-enforcement officials, people familiar with the matter said.

Zhang Feng has been under investigation by China’s antigraft inspector since early last year for alleged unauthorized sharing of personal data collected by Tencent’s social-media app WeChat, the people said. They said Mr. Zhang was suspected of turning over WeChat data to former Vice Public Security Minister Sun Lijun, who is being investigated by Beijing for undisclosed violations of Communist Party rules.

Investigators are looking at what type of data Mr. Zhang allegedly might have shared with Mr. Sun and what Mr. Sun might have done with it, the people said.

Hong Kong-listed Tencent, which has a market capitalization of about $900 billion, confirmed Thursday that Mr. Zhang is under investigation. The case “relates to allegations of personal corruption and has no relation to WeChat or Weixin,” a spokesman said in a statement to The Wall Street Journal. Weixin is WeChat’s sister app for the Chinese market.

Mr. Zhang was referred to as a Tencent vice president in a statement released by the municipal government of Zhangjiakou, a city near Beijing, in which he was described as having met the city’s mayor in October 2018.

Tencent said Mr. Zhang has never held a senior executive position in the company or a managerial post.

It couldn’t be determined where Mr. Zhang is now. He couldn’t be reached for comment. Mr. Sun didn’t respond to a request for comment sent through China’s antigraft inspectors—the Central Commission for Discipline Inspection—and the State Council Information Office.

Mr. Zhang’s case highlights how China’s biggest technology companies can become tangled in political battles at the highest echelons of China’s Communist Party. Companies such as Tencent have access to coveted data, as well as insight into the users that provide them. Beijing’s concerns have been growing that technology companies could misuse that data or share it inappropriately, even as authorities at times demand access to it for their own purposes.

Anticorruption inspectors have been tight-lipped about Mr. Sun’s alleged offenses, saying in April that he is suspected of breaking the law. He is one of the highest-profile security officials investigated since Chinese leader Xi Jinping launched a wide-ranging anticorruption campaign against law-enforcement authorities last year.

Authorities haven’t confirmed that Mr. Zhang is under investigation.

As the probe into Mr. Zhang unfolds, Pony Ma, Tencent’s billionaire founder and chief executive, hasn’t been seen publicly in mainland China or in person at major public events. He has been spending most of his time in Hong Kong, the people familiar with the matter said.

Mr. Ma hasn’t been accused of any wrongdoing. He didn’t respond to requests for comment. China’s State Council Information Office and the Central Commission for Discipline Inspection didn’t respond to requests for comment.

Mr. Zhang joined Tencent in 2018, according to people familiar with the matter. Born in 1968, he spent most of his career in a Communist Party Central Committee department overseeing appointments of top party officials, according to stock-market filings from a Shenzhen-listed state-run company where he worked before moving to Tencent.

As Tencent’s executive responsible for government affairs, Mr. Zhang met with Chinese government officials and handled the company’s relationship with ministries in Beijing, according to one of the people.

Tencent’s mobile app WeChat is the predominant social-media platform in China. Its chat and online-payment functions make it an indispensable part of daily life for hundreds of millions of Chinese people.

Over the years, Tencent has collected a trove of data through its processing of the chat conversations and financial transactions of its 1.2 billion monthly active users, most of them in China. That has made WeChat a powerful surveillance tool for the Chinese government, which regulates Tencent and regularly has it suppress dissenting views on WeChat, the Journal has reported.

More recently, however, Chinese authorities have grown increasingly concerned that Tencent and other tech giants’ data-collection systems give them unique insight into and power over Chinese society, challenging the Communist Party’s desire to monopolize such information. In recent weeks, China has released new antitrust rules targeting internet platforms, which analysts say is motivated in part by Beijing’s attempt to retake control of users’ personal data.

Mr. Ma’s lack of public appearances—coming on the heels of China’s recent crackdown against another billionaire entrepreneur, Jack Ma, who isn’t related to Pony Ma—triggered concern among current and former Tencent employees over why the company’s founder hasn’t been seen at events.

The last publicly documented in-person sighting in mainland China of Mr. Ma, who also goes by his Chinese name, Ma Huateng, was in August 2019 in Shanghai at the World Artificial Intelligence Conference.

Mr. Ma has made only virtual appearances in Tencent’s companywide year-end gatherings since December 2019—a break from his usual practice of attending such events in person. Employees have been told Mr. Ma is recovering from a back injury. Mr. Ma, a representative of the National People’s Congress, was absent from last year’s legislative proceedings in May, citing health reasons.

While in-person gatherings largely resumed in mainland China in mid-2020, Mr. Ma missed an October ceremony marking the 40th anniversary of China’s first special economic zone in Shenzhen, where Tencent is based.

Meanwhile, Mr. Ma, 49 years old, has participated—at least by audio—in quarterly earnings calls. In November, he delivered a speech by audio at a philanthropic event.

Mr. Ma’s lower-than-usual profile has had little impact on the operation of Tencent, whose revenue and stock price hit all-time highs during the pandemic as homebound users flocked to its videogames and digital services.

Tencent is now China’s most valuable publicly traded company, having surpassed the e-commerce giant Alibaba Group Holding Ltd. in market cap most recently in December.

By Pierre-Henri de Menthon on 02.11.2021 at 07:30

3 min read

SUBSCRIBERS

INTERVIEW - With its 120,000 members, the Federation of Individual Investors and Investment Clubs is emerging in the war between Veolia and Suez. To criticize the positions of Minister Bruno Le Maire. Its president, Charles-Henri d'Auvigny, explains himself.

Charles-Henri d'Auvigny chairs the main shareholder organization in France with 120,000 members (out of 3.5 million shareholders). Created in 1969, the Federation of Individual Investors and Investment Clubs is part of the savings commission of the Autorité des marchés financiers.

Challenges - Bruno Le Maire denounced the hostile nature of Veolia's takeover bid for Suez. How do you react?

Charles-Henri d'Auvigny - On this Suez issue, as with Carrefour, we are asking the question of principle of knowing who owns these companies: the State or the shareholders? Why ban something a priori, when the shareholders are not yet pronounced. Who says that Suez shareholders want to sell their shares to Veolia? Why would the state decide on the allocation of shares owned by investors. We can understand this on strategic issues defined in advance, such as defense, agri-food, health ...

What is the position of your federation on the Veolia-Suez file?

The federation does not have to take a position. It is up to the shareholders to decide, knowing all the proposals. Each party has the opportunity to offer its solutions for the development of their project. All stakeholders: employees, customers, suppliers, shareholders can have their say and ultimately it is up to the shareholders to decide. They are the ones who invested in businesses. They have the right to insure their investment.

Are you going to give voting instructions at the next general assembly in Suez?

I repeat, between Veolia and Suez, the federation does not have to give advice. We never have and we won't. On the other hand, we can allow the two players to express themselves to our 120,000 members, some of whom are undoubtedly shareholders of these companies.

Does the state’s position surprise you?

Yes, because at a time when the State wants the French to participate in the development of companies by providing the equity they need to get out of the crisis, these declarations on Carrefour and Suez are not a good signal since the State can decide a posteriori to whom to sell and when. It is important for the French who are going to put part of their savings in companies to know whether they will be free to invest. You have to know this in advance.

Are you hostile to the concept of strategic business?

When Arnaud Montebourg spoke about strategic companies, the criteria were simple and understandable: was France dependent on a single supplier? Was the defense concerned? France had a technological advance… We need simple rules which do not change according to events and political considerations.

Is the current government hostile to individual shareholders?

The state had stabilized taxation and this allowed the arrival of new investors, particularly in the stock market. Why create uncertainties, when shareholders need precise and lasting rules of the game?

Par Pierre-Henri de Menthon le 11.02.2021 à 07h30

Lecture 3 min.

ABONNÉS

INTERVIEW - Forte de ses 120.000 adhérents, la Fédération des investisseurs individuels et des Clubs d'investissement fait son apparition dans la guerre entre Veolia et Suez. Pour critiquer les prises de positions du ministre Bruno Le Maire. Son président, Charles-Henri d'Auvigny, s'explique.

Charles-Henri d'Auvigny préside la principale organisation d'actionnaires en France avec 120.000 membres (sur 3,5 millions d'actionnaires). Créée en 1969, la Fédération des investisseurs individuels et des Clubs d'investissement fait notamment partie de la Commission épargne de l'Autorité des marchés financiers.

Challenges - Bruno Le Maire a dénoncé le caractère hostile de l’OPA de Veolia sur Suez. Comment réagissez-vous?

Charles-Henri d'Auvigny - Sur ce dossier Suez, comme pour Carrefour, nous posons la question de principe de savoir qui est propriétaire de ces entreprises: l’Etat ou les actionnaires? Pourquoi interdire a priori quelque chose, alors que les actionnaires ne sont pas encore prononcés. Qui dit que les actionnaires de Suez ont envie de vendre leurs titres à Veolia? Pourquoi l’Etat déciderait de l’affectation des actions que possèdent les investisseurs. On peut le comprendre sur des enjeux stratégiques définis à l’avance, comme la défense, l’agroalimentaire, la santé…

Quelle est la position de votre fédération sur le dossier Veolia-Suez?

La fédération n’a pas à prendre position. C’est aux actionnaires de décider en connaissant l’ensemble des propositions. Chaque partie a l’occasion de proposer ses solutions pour le développement de leur projet. L’ensemble des parties prenantes: collaborateurs, clients, fournisseurs, actionnaires peuvent s’exprimer et au final c’est aux actionnaires de trancher. Ce sont eux qui ont investi dans les entreprises. Ils ont le droit d’assurer leur investissement.

Allez-vous donner une consigne de vote lors de la prochaine assemblée générale de Suez?

Je le répète, entre Veolia et Suez, la fédération n’a pas à donner de conseils. Nous ne l’avons jamais fait et nous ne le ferons pas. En revanche nous pouvons permettre aux deux acteurs de s’exprimer auprès de nos 120.000 membres dont certains sont sans doute actionnaires de ces entreprises.

La position de l’Etat vous étonne?

Oui, car à un moment où l’Etat souhaite que les Français participent au développement des entreprises en apportant des fonds propres dont elles ont besoin pour sortir de la crise, ces déclarations sur Carrefour et Suez ne sont pas un bon signal puisque l’Etat pourra décider a posteriori à qui il faut vendre et quand. Il est important pour les Français qui vont mettre une partie de leur épargne dans les entreprises, de savoir s’ils seront libres de leurs investissements. Il faut le savoir à l’avance.

Vous êtes hostile au concept d'entreprise stratégique?

Lorsqu’Arnaud Montebourg avait évoqué les entreprises stratégiques, les critères étaient simples et compréhensibles: la France était-elle dépendante d’un seul fournisseur? La défense était-elle concernée? La France avait une avance technologique… Il faut des règles simples et qui ne changent pas au gré des événements et des considérations politiques.

Le gouvernement actuel est-il hostile aux actionnaires individuels?

L’Etat avait stabilisé la fiscalité et cela a permis l’arrivée de nouveaux investisseurs notamment en bourse. Pourquoi créer des incertitudes, alors que les actionnaires ont besoin de règles du jeu précises et pérennes?

Industry warns the EU that block on exports could be fatal for British suppliers

Brussels has rejected UK requests to overturn an export ban on live shellfish including types of oysters, clams and mussels, escalating a dispute over seafood that has soured tense post-Brexit relations. 

European Commission officials told the Financial Times that Brussels would not grant the UK a special export health licence for the trade of “live bivalve molluscs” into the EU, insisting that Britain would be subject to the same export and food safety rules as other non-EU countries.

“There will be no new export health certificate at the end of April for any third country, including the UK. British exports have to fulfil the rules applied to a third country,” said one of the officials.

The shellfish industry has warned that the block on UK exports could be fatal for many small UK producers. It comes after the government was forced to create a £23m compensation fund for UK fishermen whose exports have been hit by delays caused by new paperwork in the first six weeks of the UK’s new trade agreement with the EU.

Martin Laity, who runs Sailor’s Creek Shellfish based in Flushing, Cornwall, which before Brexit sent 10 tonnes of oysters and scallops a week to the EU, said there was “no time to wait” for a resolution to the issue.

“We haven’t sent a load since December. We’ll be finished if this isn’t sorted — and 52 people have jobs in this. I knew Brexit was going to be bad but I didn’t know it would stop trade in its entirety,” he said.

George Eustice, the UK environment minister, told the House of Commons this week that Brussels had “changed its position” on the trade of live shellfish and introduced a ban on molluscs from the UK entering the bloc for purification in the EU. 

Eustice said the ban was “unjustified” but insisted there would be only a “pause” in trade until a new health licence system became “available in April” — a claim the EU has rejected.

“We continue to believe that our interpretation of the law and the EU’s original interpretation is correct and that the trade should be able to continue for all relevant molluscs from April. And there is no reason for a gap at all for molluscs from aquaculture,” said the minister. 

The EU has a wholesale ban on the import of live shellfish that are caught in the secondary category of clean waters known as class B. That includes the shellfish caught in waters off Wales and the south-west of England. Molluscs caught in class A waters such as Scotland’s can still be exported to the bloc, while pre-purified shellfish have too little shelf life to make them viable for export. 

Eustice has written to Stella Kyriakides, the EU health commissioner, to call for an “urgent solution” to the spat. He said the ban did not recognise the “existing high standards and history of trade” between the EU and UK and the government would make “reasonable additional reassurances to demonstrate shellfish health” to the bloc. 

But Brussels is set to rebuff the UK’s demands. The commission official said Kyriakides would respond to Eustice with a letter in the coming days “confirming the legal reality in this area”. 

The row over exports comes as Maros Sefcovic, EU vice-president, is due to arrive in London on Thursday for talks with Michael Gove, Cabinet Office minister, on the implementation of the Northern Irish protocol, the part of the 2019 Brexit treaty that sets out trading arrangements for the region.

Industry body Seafish said it estimated that the UK had exported about 12,000 tonnes of affected products, worth £15m in 2019 out of total exports of live clams, mussels, oysters and scallops worth £70.7m.

Sarah Horsfall of the Shellfish Association of Great Britain said that there were limited alternative markets for UK producers and that the government and the EU needed to work together urgently to resolve the issues.

“UK producers export between 60 and 80 per cent of their product and there are limited alternative markets,” she said. “Businesses will fail, and fail in the near future, if this issue is not sorted out.”

Pierre Karleskind, an MEP from Emmanuel Macron’s En Marche party and chair of the European Parliament’s fisheries committee, said Brussels should come up with a temporary legal framework to allow trade to continue until a longer-term solution was found. 

“This is a very problematic issue for [export] companies in the UK and [retailers] in the EU,” said Karleskind.

The UK’s Department for Environment, Food and Rural Affairs (Defra) said the government saw “no scientific or technical justification” for the EU’s position and was expecting to hold a meeting with the commission soon to address an issue that was of “grave concern” to industry on both sides of Channel. 

 “We’re seeking urgent resolution with the European Commission and we have offered to provide reasonable additional reassurances to demonstrate shellfish health, on the understanding the commission must recognise the existing high standards and history of UK-EU trade,” Defra added.

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