Hikvision CEO Admits Hikvision China State-Owned Company

Author: John Honovich, Published on Oct 06, 2016

Hikvision's CEO admitted that Hikvision is a China state-owned company, during a 2015 visit to Hikvision from Xi Jinping, the General Secretary of the Communist Party of China.

This was reported in the official website of the China Electronics Technology Group Corporation, which is "controlled directly by the central government." The report was written in English.

Hikvision CEO Chen Zongnian said:

“President XI’s visited means a full appreciation and support for CETC group and HIKVISION. As a state- owned company, we understand that reform and transformation cannot be accomplished in one day and should continue. In the future, we will still do our best to fulfill our mission and take responsibilities for our society and government.” [IPVM Emphasis Added]

Chen, Chairman and Communist Party Secretary of Hikvision as well, has also declared:

"Every party member must consciously accept the [Communist] party's leadership, effectively strengthening the party's leadership, strengthen the Party's vitality, comply with party discipline.... All Party members united as one, as "personal dream", "Hikvision Dream", "China Dream" and efforts!" [IPVM emphasis added]

This is consistent with our reporting on Hikvision's origins and Hikvision's financial report disclosing that the Chinese government is their 'controlling shareholder'.

Message to Hikvision Partners

We recognize many Hikvision partner's frustration with our continued reporting. We do so because (1) Hikvision 'overseas' marketing continues to deny this and (2) because we continue to find definitive evidence to prove to you that this is true.

Tell the Truth Hikvision Overseas

Perhaps the 'overseas' Hikvision marketing staff suffer from a combination of willful ignorance and Hikvision Hanghzhou HQ hiding information from them.

Regardless, the evidence is clear, and the false assertions of Hikvision's independence and that Hikvision is not a state owned / controlled organization should stop.

As soon as that is done, we can all focus on the more complicated and important question of what Hikvision's Chinese government control means for 'overseas' buyers.

10 reports cite this report:

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Hikvision's iVMS-4500 application will be discontinued in days, on December 30th, confirmed by multiple Hikvision technical support...
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The escalating attention towards Hikvision's China government ownership and Genetec's removal of Hikvision due to cyber security concerns has...
Genetec Expels Hikvision on Nov 08, 2016
Genetec has removed support for Hikvision devices, deeming them 'untrustworthy', citing customer concerns about Chinese government ownership /...
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Comments (104)

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Has there been a difinitive test to confirm that if we change default passwords, hacking threats are minimized? They are obviously using these systems in China to spy on citizens (proven in recent article). Are they doing it overseas?

Why are we not treating this much like eventually happened when the Chinese were dumping steel in to the US?

if we change default passwords, hacking threats are minimized?

For sure, changing default passwords helps reduce hacking threats. And Hikvision has done a good job making things more secure with their 5.3 post-hacking firmware.

Are they doing it overseas?

No evidence that Hikvision is spying on anyone overseas. The risk is more about the future, especially given the government control.

Why are we not treating this much like eventually happened when the Chinese were dumping steel in to the US?

Steel is a much much bigger industry. Beyond that, I do not know enough about the technicalities of dumping to comment. Certainly, though, the economic aspect of what Hikvision is doing with their overseas sales and marketing push combined with continued price cuts is a concern.

How many articles do we need about this, honestly? The horse has been beaten to death already. John, are there people who try to deny this?

John, are there people who try to deny this?

Yes, Hikvision themselves. Hikvision just published an interview this week denying it. This is the 3rd one of the year doing so.

I emailed a copy of this post and a request for Hikvision to retract their denial. We plan a post next week on that, either with Hikvision's retraction or to call attention to their refusal to do so.

Jon, do you think Hikvision should admit this?

That seems like semantics, don't you? The question was "are you controlled by the government", which could be denied. They do have a CEO who runs the company. Unless that CEO holds an office in the government, they could factually answer the question the way they did.

And I know this is going to seem as if I am coming to their defense. People will mock me for it. I really don't care. I just don't see it as being so offensive even if it was true. So having every other post about who owns Hikvision is just reaching the point of being old news and blasé.

Jon, in the interview, Hikvision's regional GM says:

'Hikvision is a global, independent publicly traded company'

But Hikvision's actual CEO confirms that Hikvision is a China 'state-owned company'.

What is your position? That Hikvision is both 'independent' and a 'state-owned company'?

This seems factual to me. Are they listed on an exchange? Could I buy shares if I wanted to? This fact and a partial government stake don't have to be mutually exclusive. They both can be true, no?

Could I buy shares if I wanted to?

No, you cannot buy Hikvision 'A' shares on the Shenzhen stock market. They are tightly restricted to foreigners and only limited QFIIs are allowed.

partial government stake

It is a controlling 'stake' as proved from their own financials:

Claiming to be 'independent' is not accurate in light of being a 'state-owned company' with the controlling sharedholder being the Chinese government.

So where is the deception then? Where is the smoke? It is well documented? It's not a secret?

So where is the deception then? Where is the smoke? It is well documented? It's not a secret?

The deception is that they are running 'interviews' in trade magazines spinning it that they are independent.

Far far less people will read through a 175 page financial report that was never promoted vs PR 'interview' sent out in newsletters.

As of June 30, 2016, 41.88 percent of Hikvision’s shares are jointly owned by China Electronics Technology HIK Group Co., Ltd. (CETHIK) and CETC No. 52 Research Institute, both are part of CETC, a state-owned enterprise;

This is from the same article. You seem to be hell bent on thinking they are trying to deceive someone. I just don't see the deception.

a state-owned enterprise;

This is from the same article. You seem to be hell bent on thinking they are trying to deceive someone. I just don't see the deception.

Jon, Hikvision is admitting that 2 of their shareholders are state-owned, not that they are.

I already explained this to you in another comment you made further down in the thread. I will copy it here for completeness:

Jon, you are misreading what Hikvision is saying.

The state-owned reference is about their shareholders. Hikvision's point, in that marketing, is that the shareholders are state-owned but that they are not, ergo the 'independence' claim and ergo the 'diverse set of shareholders' line.

The reality, though, is that Hikvision is state-owned itself (as the direct quote from Hikvision's CEO says above) and Hikvision's controlling shareholder (out of the 'diverse' shareholders) is the Chinese government.

Many companies are running stories and creating advertisements that "stretch the truth", Not to say HIKVISION is BUT its been going on since they invented advertising.

After the 3rd, 4th, no 5th time it was a lead story I felt I already had the information I needed to make an informed decision, so yes Jon I agree with your comment fully.

I care more about Kim Kardasian's choice of a Hat to wear tonight.....

I care more about Kim Kardasian's choice of a Hat to wear tonight.....

Now you've gone too far...... 😂

If you do not care then why read much less post?

You will be able to buy Hikvision stock as a regular Joe foreigner in the future. They have been planning to list on Hong Kong Stock Exchange for several years. The volatility of Chinese stock market last year has pause the activities for now.

http://www.wsj.com/articles/hangzhou-hikvision-plans-hong-kong-ipo-1421743506

Do you believe there are any independent publicly traded companies, then?

Aren't they all 'dependent' on their shareholders?

Unless that CEO holds an office in the government, they could factually answer the question the way they did.

Not only does the CEO Chen Zongnian hold an office in the government, as a Communist Party Secretary, but so does Hikvision's R&D executive Pu Shiliang who is a technical leader within the Ministry of Public Security.

Thank you for that comment I could not have said it any better.

Nothing valuable to add at this time

As an independent and publicly traded corporation, Hikvision has a diverse set of private and public shareholders. As of June 30, 2016, 41.88% of Hikvision’s shares are jointly owned by China Electronics Technology HIK Group Co., Ltd. (CETHIK) and CETC No. 52 Research Institute, both are part of CETC, a state-owned enterprise

Source: http://www.hikvision.com/en/about_694.html

Seems like that is both factual and acknowledges the public ownership.

acknowledges the public ownership

Jon, they are not acknowledging the government ownership in that paragraph.

Hikvision says:

As an independent and publicly traded corporation

'Publicly traded corporation' means that the stock of the company is traded on a 'public exchange', in this case A shares in the tightly government controlled Shenzhen market. The shares are 'public traded' but the controlling shareholder, as Hikvision confirms in its own financials remains the Chinese government:

a state-owned enterprise

Man, do you have blinders on? It clearly says STATE-OWNED. Geez

Jon, you are misreading what Hikvision is saying.

The state-owned reference is about their shareholders. Hikvision's point, in that marketing, is that the shareholders are state-owned but that they are not, ergo the 'independence' claim and ergo the 'diverse set of shareholders' line.

The reality, though, is that Hikvision is state-owned itself (as the direct quote from Hikvision's CEO says above) and Hikvision's controlling shareholder (out of the 'diverse' shareholders) is the Chinese government.

And I was accused of using the Chewbacca defense..... 😂

I must be reading something wrong, but you sure aren't articulating it to the point that I see your side of this. Every single thing you seem to take offense to says "we are partially owned by the Chinese gov" (paraphrasing).

Is it your assertion that Hikvision is 100% owned by the Chinese government?

Jon, my assertion is Hikvision's CEO's assertion, that Hikvision is a China state-owned company whose controlling shareholder is the Chinese government.

The fact that the Chinese government does not own all the shares is irrelevant to the fact that the Chinese government is the controlling shareholder of Hikvision, which their own financial report acknowledges.

Hikvision's marketing people has been spinning the "we are partially owned by the Chinese gov" claim into "they are just one of many", which is what I am objecting to since the government ownership is the controlling one.

Btw, earlier you claimed

Unless that CEO holds an office in the government, they could factually answer the question the way they did.

And I replied that the CEO Chen Zongnian does hold an office in the government, as a Communist Party Secretary plus their R&D VP is also a Chinese government official - two other government controls that Hikvision ignores in their marketing.

I haven't seen the spin you purport and you haven't linked it, that I've seen. You are blinded by such hatred that you split hairs over semantics. It is so transparent. And I'm giving as much credit as I can here. If this isn't the case, then this is simply clickbait.

I have since agreed with you that the majority shareholder is the Chinese gov, which naturally has controlling interest. I was only trying my best to find anything that states otherwise.

Breaking News!


New conspiracy theory


If/When HIK will destroy CCTV industry
IPVM/JH will have nothing to talk about
get it...? :)

You are blinded by such hatred

I just defended Hikvision at the beginning of the thread when Jeremy Ellis asked about the password issue and Hikvision spying overseas. Hardly the action of blind hatred.

I found a highly relevant article on a Chinese government website that no one has ever talked about. If that is clickbait to you, so be it. You can continue to criticize us for how we cover your business partner but it will not impact us.

You found an article that states exactly what their website states. That's hardly news.

You found an article that states exactly what their website states.

The website states that among their 'diverse shareholders' includes 2 state-owned companies. The website and Hikvision's own marketing continues to claim 'independence' and that they are not themselves a state-owned company.

I found evidence directly from the Chinese government, with a direct quote from Hikvision's CEO saying otherwise.

We have gone around this point multiple times. If you disagree, so be it but I do not see why it is productive to debate the same point repeatedly.

Jon,

If this is old news why read? Why comment other than in defense of HIK if this is not important to you?

Why do you think Hik calls CETC the controlling shareholder?

They don't have to as it doesn't control a majority of stock, even if it is the largest shareholder.

Controlling shareholder

Hikvision employee sounds off on being state-owned:

This is, at least, a more honest approach, though certainly many do care.

I see the war of 2 Johns here :|

Dillabaugh, I hold you in high regard, but I have to disagree with you and take the side of Honovich here. He's asking for accountability and transparency (hilariously from a Chinese Communist Party owned company) from Hikvision in their international and North American representation to fully admit the nature of their upper management/ownership in China as a STATE OWNED COMPANY.

It does matter to a number of us and I would prefer to not be watched by the same government that drove my father and his family out from Chi Tung and dragged my mother's grandfather out to be publicly stoned to death for just owning a patch of land. It may sound petty and personal, but that ****ing matters to me deeply.

Are they the same people as who is in charge now? Yes, they just settled in and got comfortable. That government currently restricts the free speech of its masses, gives its people no real voting power and no political options besides complying with the party, and does little to ensure that companies within its borders respect the intellectual property of companies abroad.

As bad as things are in the USA, I am thankful I am not in China, because I can at least speak out about our problems here and criticize the people who get us into our messes. I am also thankful that our capitalism (while unfortunately in the process of an oligarchical takeover) is not unbalanced by state run businesses that stifle competition and innovation.

This specifically matters in our line of work because this Chinese Communist Party run business makes surveillance devices which have the power to collect information on their behalf, no matter how much we can pretend to ourselves that we can block off their not-so-imaginary back-doors. This enables them to steal state secrets, corporate secrets, and even more intellectual property than they already do AND monitor their detractors world-wide.

I know you are smart Dillabaugh. I know you trust in your abilities, but can you be 100% sure that this government is not capable of getting around all of your preventative measure to access the products THEY DESIGNED AND PROGRAMMED for their own nefarious purposes? I don't live in that comfort zone. That's for sure.

Robert, I think my question is more about the deception that John is seeing that I am not. I am not questioning or debating the actions of the Chinese regime as valid points.

My stance is this; Hikvision is clearly majority owned by arms of the Chinese government, which would obviously mean they have controlling interest of the company, as John has repeatedly shown. How many more times does his readership need this pointed out?

People, such as yourself, have very valid reasons to discriminate or hate the Chinese government. I won't take that away from you or use it to discredit you in any way. That is your right.

However, when I show indifference, somehow I get attacked. When I don't share the same outrage, I'm somehow lesser of a human.

Okay, I see what this is.

Honovich isn't reaching out to us. I assume he knows that we know. His goal is not to preach to the choir. Notice that this article does not require a membership. That means we're not his audience here. His audience is anyone who will listen so they can see that Hikvision is not the independent entity it sometimes plays itself off as.

Remember, IPVM still considered an industry news source/publication here. His audience is not always limited to the members that have signed up for an account.

Clickbait disguised as disdain?

This specifically matters in our line of work because this Chinese Communist Party run business makes surveillance devices which have the power to collect information on their behalf, no matter how much we can pretend to ourselves that we can block off their not-so-imaginary back-doors. This enables them to steal state secrets, corporate secrets, and even more intellectual property than they already do AND monitor their detractors world-wide.

Robert, you re-sell Dahua, no?

Do you believe that Dahua is somehow beyond the reach of "a government currently restricts the free speech of its masses, gives its people no real voting power and no political options besides complying with the party"?

Dahua is partially owned by CIC. Does that make them owned by the Chinese government?

Jon, what percentage 'partial' do you mean?

I see this reference for Dahua ownership:

John, do you still think that ownership is a game changer?

Yahoo, an online firm, has had a bad run of news. On October 4th came a fresh blow when Reuters, a newswire, reported that the company had written customised software to scan all incoming e-mail for certain keywords, complying with a request either from America’s National Security Agency or the FBI.

The company’s first response was to say that it is a law-abiding company.

Article

How many other companies are law-abiding? And this example is not from China where I think that the percentage of "law-abiding companies" are much higher. A state wants - a state gets.

Yes, I was merely trying to gauge how much stake in a company the Chinese government must own before they offend your sensibilities. I assume it lands between 1.84% and 41.88%.

I assume it lands between 1.84% and 41.88%.

Jon, if you have evidence that Dahua's controlling shareholder is the Chinese government or Dahua's CEO calling themselves a China state-owned company, I'd be happy to run as a lead article on IPVM.

I think that if its as totalitarian as everyone makes it out to be, then any Chinese business is subject to the whim of the state. Hik might be on paper controlled, but Dahua isn't going to disobey the state, are they?

They have enough money not tied up by the government to get away with it. And I think their executives all have exit strategies in the form of business trips overseas they can take to try and get out of becoming Communist sock-puppets.

I can assure you that they despise any comparison (from my conversations with them) with Hikvision to make the case that they wouldn't be fond of being their clone any more than they are being told by the rest of the world that they are.

They have enough money not tied up by the government to get away with it.

Communist Party says "Dahua put a backdoor in all cameras, starting today!"

Dahua says ??????

Dahua overall might say, "Do we have to?"

After a little fight in court (I think they'll try and sue through the Administrative Litigation Law), they might be forced to comply. It will give us enough time to ditch Dahua as well if we catch wind of it.

If it doesn't hit the press in time, however, I have talked to a couple of people in there that I hope have enough integrity to not let the world stay blind to this and would blow the whistle. I just hope they can leave the country in time if they do.

I think the culture inside Hikvision and Dahua in China are vastly different. Hikvision is fully happy and compliant with being a state-owned entity. It is part of their dogma. While Dahua isn't exactly a protest company, I don't see them as just another wing of the Chinese government that would just take anything thrown at them lying down.

I believe they're at least not directly manufactured by the political party in power. Are they immune to hacking? Clearly not. Can they get better? Yes. Are they subject to the same interests? Thankfully, no. Can the government still try to turn the screws on them? Yes, but not on products already physically out there.

The difference is that Hikvision is the government having control over both the hardware and software DESIGN and PRODUCTION. Dahua, while at least having to obey the laws of that government, is not explicitly ordered to engineer a backdoor for the Chinese government as far as we've seen. I'm pretty sure though, if there were some link that would insinuate that and if there were some proof in the products we've seen so far, IPVM would be equipped to sniff it out.

Now, this also plays into my desire for additional community driven software/firmware development for surveillance products. I can't fully trust these companies, but not necessarily for the same reasons I don't trust Hikvision. I don't always trust Dahua to be quick to adapt to the needs of its market and to give comprehensive support for the products it sells. It's why SavvyTech is here to provide that service.

You're right, Dahua leaves a backdoor for everyone! 😂

Not in our new firmware dammit >.>

But yeah, admittedly bad. I am actively getting on their case for it. And I'm trying to figure out whether or not their firmware programmers are drinking on the job. I kid, I kid!

Seriously though, we just have to hold them accountable and try and bring our needs and concerns to the forefront of their priorities.

Oversight and mistakes can be cured though. A hidden directive from a totalitarian government that actually has their hand up your ass is a whole different matter altogether.

You can't blame me for grabbing low hanging fruit

At least I can take my black eyes like a man.

Dahua, while at least having to obey the laws of that government, is not explicitly ordered to engineer a backdoor for the Chinese government...

Cut the crap. Who was explicitly ordered to engineer a backdoor for the Chinese government?

It would be Hikvision since:

  1. The Chinese government has a controlling share in their business
  2. Their CEO, Chen Zhongnian, is a Communist Party Secretary
  3. Their VP of R&D, Pu Shi Liang, is part of the Ministry of Public Security

Our own government has publicly asked for backdoors before, but you can be assured that the Chinese government won't be so upfront. They wouldn't need to be with a company they OWN.

Robert, you said

Dahua, while at least having to obey the laws of that government, is not explicitly ordered to engineer a backdoor for the Chinese government as far as we've seen.

Hikvision has not been explicitly ordered to engineer a backdoor for the Chinese government as far as we've seen, either now has it?

Maybe you want to change your statement to "could not be explicitly ordered"?

Actually, I won't argue that Dahua could not be explicitly ordered to create backdoors for the government either. That statement would be false. The difference with Dahua is that there's a higher possibility that this would be more publicly outed.

With Hikvision, the order for a government backdoor would be just like an internal memo. No disclosure, no transparency, no outrage, no argument, no opposition, nothing. So for all any of us know, Hikvision might have already executed explicit orders to implement backdoors for the government.

With Dahua, I would imagine it going very differently with at least someone trying to blow the whistle and make some kind of media outreach while seeking asylum in a foreign country. Heck there may even be a chance that Dahua could try and put up a fight.

To me, Dahua is the guy trying to put up a fight against a 500lb state-sponsored gorilla. I'm going to root for him while hoping the whole fight isn't rigged and I'm not watching the WWE.

Two issues here:

1) You assume they won't just inject the malware directly without asking.

2) Wouldn't the gov rather risk trashing the name of a company they DON'T have a large stake in? If they ruin the name Hikvision (I know, too late) by inserting a backdoor/malware and get caught, their entire $6B investment goes up in smoke. If they infected the Dahua brand instead, they have much less to lose.

(Puts tin foil hat back on)

Ahh, but at least that's not by design. That would just mean Dahua needs to get better at making firmware that can avoid such unauthorized injections in the first place.

At this point a threat assessment by doing chip by chip breakdowns of Hikvision products would be a conclusive way of determining whether or not they're capable of phoning home or are listening for special handshakes.

Then we can do firmware dumps and go line by line.

If Honovich thinks its worth the time for a full investigative effort, I'm sure we'd be interested to read the results.

Robert, I give you a lot of credit for your ambitious posts.

But here's a tip, viciously attacking Hikvision while vigorously defending Dahua is simply not going to work here. Choose one or the other. They're not the exactly the same of course, but there is just too much bleed over between the two.

Worse is the fact that you OEM Dahua.

At least I'm fair and even-handed in stating that Dahua needs a lot of work to pull away from the stigma of Chinese manufacturers as a whole and that they needed to close their own security holes before they can speak to being the better choice from China. Dahua did mess up very recently with Tim Wang. Dahua messed up less recently with insecure firmware but because they weren't proactive in fixing those problems it's come back to bite them in the ass.

However, I am not going to write off my manufacturer when the reps I work with are working hard to make better impressions in the states. Large companies move slow so I'll poke and prod till I get results.

For now, the best I can do is work with the relationships and the products I have and support them better than anyone else does. That includes holding my own manufacturer accountable whenever I communicate with them. That and dragging out whatever additional support I can in the form of additional firmware updates and feature requests.

The main reason I can still stick by Dahua is that they're taking the input from me, a 2.5 month newbie in the industry, to heart at least on some level. Albeit it is all slow and steady, they're making progress. Now if only they took some time to actually listen to critics like yourself, we could make some more progress.

Dahua itself may need some work, but I will try my damnedest to be the best interface you can get with them, because in the end, we all need cost efficient products.

...me, a 2.5 month newbie in the industry...

By all means post in Origin Stories - How Did You Get Started In The Security Industry? when you have a chance.

Oh wow... I really need to browse this site more. Hmmm... not sure if it's autobiography material, but I'll see if I can entertain.

I just wondering... Could you please clarify the source of products your company proposes? I checked the web site and images looks very familiar...

I sent you a message. I think it's in your email? I dunno how this site's messaging works yet.

There is no need to engineer a back door when they have keys to front door.

admin:12345 is not root level access

the manufacturer has the root password.

"admin" just has root like privileges, any linux OS based system always has a root user

AXIS, Panasonic, and Samsung firmware images all have a separate "root" account that you dont have access to. I am sure there are others But those are the three that I have cracked successfully and poked around in.

I am about halfway done with Hikvision but it looks very similar to that others in structure.

so that begs the question do you trust your manufacturer with root access to your embedded Linux devices or the ones you put in ? because unless they are like the old AXIS IP devices that have root:1234 as default you dont have root access from what I have seen

As I said, I want to see more community driven IoT firmware development. Hell, my crazy ass wants to see if we can retool Microsoft's Singularity and Barrelfish projects into a completely new basis for IoT.

Linux is too monolithic of a kernel and the code is too unmanaged to ever be truly secure. If we can stick a microkernel operating system on these IoT devices and ditch the need for drivers altogether then we can really change the game.

If we can stick a microkernel operating system on these IoT devices and ditch the need for drivers altogether...

Robert, devices with microkernels still need drivers altogether.

I mentioned Microsoft Barrelfish for that reason.

Yes, I remember that. Except that the plan was to move from user mode drivers to something entirely different where the very idea of drivers became a database of machine operating codes. Mind you this was just a German research project by Microsoft. They had lots of crazy vaporware :|

Which AXIS cameras and what firmware are you saying you don't have access to root with?

http://www.nytimes.com/2016/05/17/technology/china-quietly-targets-us-tech-companies-in-security-reviews.html

my personal favorite quote form the President Xi

Mr. Xi ultimately said China must find a middle ground and determine “which things can be imported but have to be secure and controllable; which things may be imported, digested and absorbed for re-innovation; which things can be developed in collaboration with others; and for which things we must rely on our own strength and indigenous innovation.”

Congrats the communist leader just admitted china's goal is to steal and re-brand anything they can. and since Hikvison is a state-owned enterprise.....

Although I wonder how how far and to what end his "re-innovation" that he speaks of really goes.

point is china is going though our imports looking for exploits...

china owns Hikvision and we are bad evil "fill in the blank" -phobes/-ists not to be worried or avoid government owned electronics?

http://freebeacon.com/national-security/cyber-threat-china-russia-undeterred-weak-obama-cyber-security-policy/

China’s impunity remains the most serious result of the current failed policy. The administration in 2014 indicted a small group of Chinese military hackers with little or no prospect of ever prosecuting them. To date, there have been no sanctions imposed for China’s hack on the Office of Personnel Management. Obama was ready to sanction the Chinese government for the OPM attack in September, but backed off after a promise from Chinese leader Xi Jinping to curb government-backed cyber economic espionage—a promise that does not cover the Big Data intelligence gathering that took place in the OPM hack, and which is beginning to affect U.S. intelligence personnel.

good thing it was to curb it right? although not as good as end it but hey we have the NSA and only god and snowden knows what they do.

can you imagine all those linux ARM devices with root level access playing around in your network? even if its a DOS attack?

no I am sure I am just being paranoid. he said he would curb that kinda stuff........

Message to HikvisionPartners

We recognize many Hikvision partner's frustration with our continued reporting. We do so because (1) Hikvision 'overseas' marketing continues to deny this and (2) because we continue to find definitive evidence to prove to you that this is true.

Infinite loop

Konstantin, that's a clever observation! It may very well be but each time we find more proof that they are lying, the worse it becomes for them.

There are definitely going to be people like Jon and Marty who will make excuses for Hikvision no matter what, but there are a lot of significant industry participants that care about the truth of this matter.

I'm not excusing anyone of anything. Just because I don't have the same disdain for China doesn't mean I've excused anyone. Just because I choose to sell a given product, a product that was made by a company that is partially owned and controlled by the Chinese government, doesn't say anything more than I'm apathetic about the whole issue you take offense to.

Jon, I respect your comments immensely throughout your various posts. However, at this point I recommend turning off the computer for a couple hours to a couple days. Your emotional investment in this is too substantial to grasp any point that does not align with your opinion.

If this is not the most commented post I have seen in the past 2 1/2 years of membership I would be surprised.

I don't understand why you have never bothered to post this paragraph on Hikvision's own website, in plain English it states its corporate structure and ownership:

1. Hikvision corporate governance structure

As an independent and publicly traded corporation, Hikvision has a diverse set of private and public shareholders. As of June 30, 2016, 41.88% of Hikvision’s shares are jointly owned by China Electronics Technology HIK Group Co., Ltd. (CETHIK) and CETC No. 52 Research Institute, both are part of CETC, a state-owned enterprise; 18.28% is privately owned by Mr. Kung Hung Ka (a Hong Kong permanent resident); 8.48% is owned by the company’s founders and executives; and the remaining 31.36% is owned by A-shares investors; International institutional investors such as UBS AG and JP Morgan are among Hikvision’s top 10 shareholders. Currently, Hikvision’s Board of Directors consists of eight directors, three of whom are independent directors. Five non-independent directors include Mr. Chen Zongnian and Mr. Liu Xiang designated by CETHIK and CETC No. 52 Research Institute; Mr. Kung Hung Ka, the founding shareholder; and, Mr. Hu Yangzhong and Mr. Wu Weiqi on behalf of the Company’s senior management team. The three independent directors are Mr. Cheng Tien-Chong, former president of Hewlett-Packard China, president of Texas Instruments Asia Pacific, and vice president of Hon Hai Precision Industry Co. in Taiwan; Mr. Wang Zhidong, founder of SINA Corporation listed on NASDAQ; and Mr. Lu Jianzhong, a former partner at PricewaterhouseCoopers.

This is the very first paragraph on the company about page: http://www.hikvision.com/us/about_10741.html

Hiding? Hardly.

Victor,

That has already been shared by Jon D 2 hours ago, earlier in the thread, and I have already responded in detail about how that statement misrepresents Hikvision's true structure.

To sum, the paragraph falsely claims Hikvision is 'independent', misrepresents that the government is the controlling shareholder with the 'diverse set of private and public shareholders" claim.

If you would like me to respond to specific assertions in that page, I am happy to do so, simply list what you would like commented on.

Clear winner from the in-depth IPVM coverage of Hika-gate:

Avigilon

Clear winner from the in-depth IPVM coverage of Hika-gate:

Avigilon

It is not an issue of one or the other. For example, our coverage of Axis has been quite in-depth and critical over the last few months:

With Avigilon, that is their own issue, there is just not as much to say about them anymore given their fall / slow down, though we just released a post yesterday - Avigilon CEO Aims For $3 Billion.

Hi john

just asking why foreign invester cannot buy freely American companies like some public trade oil companies. Such transactions were denied by State due to national security reason

Avigilon is out of Canada.

Avigilon is out of Canada.

How soon?

So, to clarify; the guy here (Jason Yang) - in an interview with the heading 'A Trusted Partner' - is telling a bare-faced, out & out lie?

Hikvision: A Trusted Partner

So, to clarify; the guy here (Jason Yang) - in an interview with the heading 'A Trusted Partner' - is telling a bare-faced, out & out lie?

No, absolutely not a bare-faced lie.

He's equivocating though, IMHO, which is still deception.

Equivocating is when you use a word or phrase intentionally in a way your audience may not be expecting.

For instance, a wife asks a husband, "Did you go to the doctor today?", he says "Yes I went." (But they were closed.)

In the same way, when Jason says Hikvision is not “controlled by the Chinese government", he may be opting for the more casual interpretation, i.e. the Chinese governement is not making decisions for Hikvision on a regular basis, and therefore is not controlled.

Jason may not know of anytime the goverment actually has told them what to do, and so its a easy thing to say.

Making it even easier is when the journalist is complicit with the equivocation and does not challenge it or clarify it.

The 'independent' claim, contrasted to what Hikvision's CEO said about being a 'state owned company' is a lie.

Also, in that same interview, he lists Hu Yangzhong as their CEO. This is untrue as Hikvision's financial records list Hu as General Manager only. Also, omitting Chen, the CEO, Chairman, Party Secretary, etc. distorts the truth about Hikvision.

Note: As I mentioned above, I have sent this to Hikvision, asking for them to retract / respond.

The 'independent' claim, contrasted to what Hikvision's CEO said about being a 'state owned company' is a lie.

41% of a company is not a majority. Even if they are the biggest shareholder, they could be outvoted by the rest, no?

Here's another company 40% owned by a China SOE, with a different outcome.

Shares could be diluted, directors replaced etc. Of course, even if technically possible, I imagine that its highly unlikely to happen. But there is a tiny bit of wiggle room there.

I agree its a deception, and a equivication, just not bare-faced, which is what the poster asked.

Even if they are the biggest shareholder, they could be outvoted by the rest, no?

Give me an example of where a China state-owned A share corporation was taken over in a hostile takeover, where the non-government shareholders voted against the wishes of the government stake.

Your example is inapplicable. The company you cite is the National Grid Corporation of the Philippines, and the Philippines government expelled China as part of the ongoing territorial dispute. Completely inapplicable to your question about voting for a China based company (Hikvision) who is the main supplier of video surveillance to the Chinese government.

Also, another factor that makes Hikvision not independent is that Hikvision's Chairman is a Chinese government official, etc.

I heard from another 2 Hikvision people today about this, with them criticizing us for 'old news'.

I do find that a fascinating response since their Corporate response is that this is not 'old news' but wrong. I'd love to see Hikvision corporate address this article from the government parent company (CETC).

Well there's a point 41 percent anywhere in the world I had companies is not control. Now you can argue that the managers have enough shares to put them over the magic number of 50 percent and one share to have control. This may or may not happen although it might be bad for the managers health to go against the largest shareholders, but who know stranger things have happen in the world

41 percent anywhere in the world I had companies is not control

Larry, please...

Hikvision, in their own financial report, says the Chinese government is their controlling shareholder.

Are you suggesting Hikvision is wrong or lying about who their controlling shareholder is?

Lol could be Chinglish but at 41 percent the possibility of being out voted is possible

Come on, Larry, be fair. Explain to me why Hikvision itself says the Chinese government is their controlling shareholder?

I'll address the 41% point right after you do that.

...why Hikivision itself says the Chinese government is their controlling shareholder.

This is good question.

My guess is that since cetc was their controlling shareholder in the earlier days, and have continued as their largest shareholder, they have not updated the language.

Do you have any reason to believe that the Chinese corporate charter works differently then it does in the West, in that less than 50% can be controlling.

Honest question, I don't know.

in that less than 50% can be controlling.

Yes, less than 50% can be controlling.

I am working on getting a Chinese language / Chinese market citation for this, but the Chinese economics expert who consults for us says that sub-50% China state controlling shareholder setup is commonplace in China.

Here is a US / English example on this point:

A shareholder does not necessarily have to own a majority of the stock to be a controlling shareholder. Rather, a small group of shareholders who together own a majority and who act in concert may be controlling shareholders

As for Hikvision, 'less than 50%' just counts CETC's direct owned shares, not the other shares that the Chinese government also controls.

Here is an example, a 2016 Bank of China report lists them (a China government bank) as owning 37.9 Hikvision million shares. Add them to CETC, etc...

I am happy to do another post that does a lower level analysis of Hikvision shareholders that examines how this all works out.

As for Hikvision, 'less than 50%' just counts CETC's direct owned shares, not the other shares that the Chinese government also controls.

Yes, though there is a place for reporting such relationships in the finacials, it shows cetc being comprised of just the two shareholders.

Yes, CETC is just those two shareholders but CETC is just one piece of the Chinese government.

As I cited above, there are other divisions of the Chinese government (e.g., Bank of China above) that are also significant shareholders. Combine them together and its control.

This link shows the Chinese gov owns 54.2%....

Jon, I did see that as well but I did not want to cite it because I am not sure how they are getting that number.

Here it is for others:

Notice that they list SASAC there (rather than CETC). SASAC controls CETC and many other government owned entities. So it appears they are aggregating all of them into SASAC.

So - just to be clear here - we've allowed a Foreign Owned corporation (by a government that is less than friendly to the US way of life) to place their product in our secure facilities in the DOD / State Department / Embassies and we're okay with this?

Well, sell the farm Martha - might as well close up shop - the barbarians are at the gate.

(Insert abject despair here)

This won't end - ever - until we get a backbone and DEMAND our Federal Government enforce the laws on the books in regard to procuring from Chinese vendors.

Hey, I tried to get you to sign my petition, but you ignored my email from a while back.

To be fair... Honovich didn't sign or share it either. He had fair reasoning though.

...but you ignored my email from a while back.

I can't imagine why.

Robert - Petitions accomplish next to nothing. I apologize for not responding sooner to your post - been traveling for the past four weeks and am now getting around to non-essential email and viewing. I prefer to work through issues directly with the end-user (namely the federal government). If you can present a cogent case with them in regard to their FCO and procurement specialists violating CFR, then they will build it up as a matter for future consideration. Petitions have no weight of law or precedence.

Additionally, I've reached out to my representative and senator(s) on this issue and then have a better chance of affecting change than I ever could.

Hikvision has now run the same denial in SourceSecurity. It is attributed to a different Hikvision employee but largely identical claims / language.

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