Summary
- Tencent denies links to Chinese military, willing to pursue legal action in response to US designation.
- Classification negatively impacted Tencent, causing a seven percent drop in share price.
- Attempt by Tencent to purchase Ubisoft stalled due to Guillemot family’s reluctance.
Earlier this week, it was reported that Riot Games owner and Larian, FromSoftware, and Ubisoft investor Tencent had been designated a Chinese military company by the United States Department of Defense.
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The company vehemently denied it was linked to the Chinese People’s Liberation Army, calling the designation a misunderstanding and a mistake. Now, in a further statement, Tencent has confirmed that it is willing to pursue legal action with the United States Government in order to reverse the ruling.
“The Company Is Neither A Chinese Military Company Nor A Military-Civil Fusion”
In a statement on Tencent’s website provided to PC Gamer, the company said, “As the Company is neither a Chinese military company nor a military-civil fusion contributor to the Chinese defense industrial base, it believes that its inclusion in the CMC List is a mistake. Unlike other lists maintained by the U.S. Government for sanctions or export control measures, inclusion in the CMC List relates only to U.S. defense procurement, which does not affect the business of the Group.”
It added, “The Company intends to initiate a Reconsideration Process to correct this mistake. During the process, it will engage in discussions with the U.S. Department of Defense to resolve any misunderstanding and, if necessary, will undertake legal proceedings to remove the Company from the CMC List. The Company will make further announcement(s) as and when appropriate.”
If necessary, [Tencent] will undertake legal proceedings to remove the Company from the CMC List.
PC Gamer notes that the classification had a significant impact on Tencent, with the share price of the company dropping by around seven percent immediately following the announcement. While the designation won’t stop Tencent from doing business with the US, outside of the Department of Defense, the stark impact of the ruling can be seen in the company’s share price, and it’s natural that it would be seeking an immediate resolution.
It’s the second piece of bad news surrounding Tencent this week, as the publisher’s attempt to purchase and take full control of Ubisoft has reportedly stalled due to the Guillemot family’s reluctance to relinquish full control to the Chinese publisher.
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