Huawei should IPO in America. Not London, Hong Kong, Tokyo, Frankfurt, or Toronto, but New York -- the heart of America’s capital market.

In fact, Huawei should file its S1 paperwork as soon as the Holding Foreign Companies Accountable Act (HFCAA) passes Congress and becomes law. The bill already passed the Senate, appears to be swiftly making its way through the House of Representatives, and will likely land on President Trump’s desk by the end of this summer.

Isn’t now the worst time for a Chinese tech company to go public in America?

Not if you are Huawei -- already the most despised Chinese tech company in America and the pinata of the US-China trade and technology cold war. Becoming a public company and being subjected to the SEC’s Public Company Accounting Oversight Board (PCAOB) is perhaps the company’s best way forward.

What’s the HFCAA?

The major purpose of the HFCAA, as it currently stands, is to strengthen the enforcement of the PCAOB’s oversight power. The PCAOB is designed to be the neutral third party that verifies the work of the accounting firms that audit public companies’ financials -- the auditor of the auditors. It was born out of America’s own accounting scandals in the early 2000s, namely Enron and Worldcom. Among other things, this bill would require all companies publicly listed in the U.S. to be certified that they are not under the control of a foreign government. This status must be verified by the PCAOB via its own independent audit of the company’s ownership structure and financial information for the last three straight years.

All publicly-listed American companies and foreign, non-Chinese companies already abide by the PCAOB’s oversight. Chinese companies have been the exception to this standard for the last decade. Because of China’s economic hypergrowth, Chinese companies’ public listing has been a big source of business for Wall Street -- keeping the hordes of underwriters, bankers, hedge funds, lawyers, and accountants handsomely paid. Thus, the financial service industry lobbied the SEC to compromise on its requirements with regard to Chinese companies. This compromise, combined with a series of actions by the Chinese government to stonewall the PCAOB access to the necessary financial documents to do its auditing, led to where we are today.

Why Should Huawei Bother?

The list of controversies and allegations surrounding Huawei is long: corporate espionage, intellectual property theft, national security threats, backdoors for the Chinese government, to name just a few. Becoming a public company won’t clear up all these controversies, but it will help bring transparency to what I believe is the root cause of many of Huawei’s problems: ownership.

Nobody knows exactly who or what owns Huawei. Without that knowledge, it’s impossible to discern and trust Huawei’s actions and motivations. It’s a private Chinese LLC. It’s famously employee-owned, with 98.99% of company shares controlled by its employees via a “trade union committee”. Allegedly, this committee pays dues to more senior trade unions in an opaque bureaucracy that ultimately leads to the All-China Federation of Trade Unions, which is controlled by the Chinese Communist Party (thus all the controversy). Yet, all this committee is apparently responsible for is organizing after-work activities, i.e. lots of badminton tournaments and hiking excursions. What runs the company’s day-to-day business operations is something called the “Representatives’ Commission”. Meanwhile, the remaining 1.01% of shares are owned by Huawei’s founder and CEO, Ren Zhengfei. He also has veto power. His daughter Meng Wanzhou, who is still house-arrested in Canada awaiting extradition, is the CFO, making the whole shop look more like a family business than an employee-owned tech company.

Sounds confusing? I agree.

Every time an allegation pops up against Huawei, including ownership-related issues, its playbook is vehement denial through a PR campaign. It also spends millions of dollars on Washington lobbyists, the latest being a $1.6 million gig for two months in mid-2019 for Michael Esposito, a prominent Trump reelection fundraiser, to soften the stance of the Bureau of Industry and Security. Two weeks ago, the same Bureau of Industry and Security, in charge of export control and the “entity list”, issued new restrictions on Huawei’s ability to use U.S. technology and software to design and manufacture semiconductors.

Obviously, all this PR and lobbying spending didn’t buy Huawei much. I wonder if Huawei’s “trade union committee” or “Representatives’ Commission” would find this a good use of money. I would rather spend that money prepping for an S1.

With the HFCAA upping the ante, there’s no better time for Huawei to clear its name, if all of its denials are indeed true. If there’s nothing to hide, there's nothing to lose, but much integrity to gain. Going public is also a clear signal that Chinese tech companies are willing to abide by American laws when doing business in America -- the same way that the Chinese government would expect American tech companies to behave when doing business in China.

When we peel away the emotions, conspiracies, and political opportunism surrounding all the US-China tension, the core problem is lack of reciprocity, which erodes trust over time. By going public on the NYSE or NASDAQ with PCAOB oversight, Huawei can begin this long, hard, but necessary journey of building mutual trust, avoiding further tension, and replenishing some much-needed reciprocity between the US and China.

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为什么华为该赴美上市

华为应该去美国上市。不是伦敦、香港、东京、法兰克福或多伦多,而是纽约,美国资本市场的中心。

一旦《外国公司责任追究法》(Holding Foreign Companies Accountable Act,HFCAA)在美国国会通过并成为法律,华为就应该准备提交S1。这项法案已经顺利通过参议院,正在迅速的走众议院的立法流程,很有可能在今年夏天结束前落到特朗普总统的办公桌上等他签字

现在不正是中国科技公司赴美上市的最差时机吗?

也许对其他公司是,对华为不是。华为已经是美国最讨厌的中国科技公司了,也是中美贸易和科技冷战的焦点。成为一家美国上市公司,接受美国证券交易委员会(SEC)的上市公司会计监督委员会(Public Company Accounting Oversight Board,PCAOB)的监管,或许是华为前进的最佳途径。

什么是HFCAA?

目前,HFCAA法案的主要目的是加强PCAOB监督权利的执行。PCAOB的存在目的是一个中立的第三方,来验证审计上市公司财务状况的会计师事务所的工作。换句话说,它是审计师的审计师。它诞生于21世纪初,是为了回应和避免美国自己当时的会计丑闻,即安然(Enron)和世通(Worldcom)。这项法案还要求所有在美国上市的公司都必须证明它们不受外国政府的拥有和控制。这个“证明”也必须通过PCAOB对其对公司所有股权结构和财务信息连续三年的独立审计。

所有上市的美国公司和非中国的国外公司都已遵守PCAOB的监管。在过去的十年里,中国企业一直是个例外。由于中国经济的超高速增长,中国公司赴美上市一直是华尔街的一门大生意——使众多银行、基金、律师和会计师获得丰厚报酬。因此,金融服务业说服了SEC就其对中国企业的要求做出妥协。这一妥协,再加上中国政府采取的一系列行动,阻挠PCAOB获得必要的财务文件进行审计,导致了今天的状态。

华为为什么该赴美上市呢?

围绕华为的各种争议和指控有很多:企业间谍、知识产权盗窃、国家安全威胁、给中国政府开后门等等。成为一家上市公司并不能消除所有这些争议,但它有助于在我认为这是华为众多争议的根源问题上提高一些透明度:所有权(ownership)。

没有人确切地知道到底谁拥有和控制华为。这个问题搞不清楚,就无法辨别和信任华为的各种行动和背后动机。华为是一家私有的有限公司,以员工持股著称,98.99%的公司股份由员工通过一个“工会委员会”控制。据称,该委员会会向更高级别的工会缴纳会费,最高一层是由中国共产党控制的中华全国总工会(因此引起了这些争议)。然而,这个委员会只负责组织下班后的活动,即羽毛球比赛和爬山旅行。管理公司日常业务的是华为所谓的“代表委员会”。同时,剩余的1.01%股份由华为创始人兼CEO任正非持有。他同时也有否决权。目前还在加拿大被软禁等待引渡的女儿孟晚舟是首席财务官。整个感觉更像是一家家族企业,而不是一家员工持股的科技公司。

看的有点糊涂?我也是。

每次有关于华为的争议,包括与所有权有关的问题,它的一贯行为是通过公关活动给予强烈否认。华为同时还在华府游说团上花了数百万美元。最近一次是在2019年年中花了160万美元雇了Michael Esposito两个月去游说美国商务部的工业安全局(Bureau of Industry and Security)。Esposito是协助特朗普连任的主筹款人之一。而两周前,这个负责出口管制和“实体名单”的工业安全局对华为使用美国技术和软件设计来制造半导体的能力出台了新的限制和制约。

显然,这些公关和游说支出并没有给华为带来多少好处。我到挺想知道华为的“工会委员会”或“代表委员会”是否认为这是个花钱的好方法。我宁愿花钱好好准备S1。

随着HFCAA继续走从提议到法律的流程,整个中美关系的紧张继续升温,如果华为对每一个争议和指控的“强烈否认”都是事实的话,那么没有比现在更好的时机赴美上市来澄清自己的名誉了。如果没有什么隐瞒的,也就没有什么损失,而会是个赢得清白的机会。上市也是一个明确的信号,表明中国科技公司在美国做生意就好好遵守美国法律,就像中国政府期望美国科技公司在中国做生意时好好遵守中国法律是一样的。

当我们抛开围绕中美紧张局势的所有激昂情绪、阴谋论和政客们的投机取巧时,最核心问题是双方一直缺乏互惠,时间长了就丧失了任何信任的基础。如果华为在纽交所或纳斯达克上市,接受PCAOB的监管,这一举动将启动一段虽然漫长、艰难但非常必要的旅程来建立互信,降低紧张的温度,并弥补一下中美之间一直亟需而缺乏的互惠关系。

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