PRC Government Entity Now Controlling Shareholder of Infinova / March Networks
A PRC government entity is now the controlling shareholder of US security manufacturer Infinova as well as its wholly-owned subsidiary March Networks, IPVM has confirmed.
This means Infinova, a New Jersey-headquartered company, has the same ultimate controlling shareholder as Hikvision. This comes at a time of unprecedented scrutiny into PRC government video surveillance and of Chinese investments into US firms.
Infinova told IPVM that "Infinova is not controlled by the PRC government", stressing this has no effect on their US operations or subsidiaries - the banking surveillance specialist March Networks and home video surveillance firm Swann.
While Infinova's new PRC government owner says it will help sales within China, it poses a risk to March Networks' major US banking customers to depend on surveillance products with such PRC government ownership.
In this exclusive report, we examine this news and its broader impact, including:
- Infinova Background
- SASAC Now Controls Infinova
- Reasoning
- SIH Examined
- Infinova Response
- National Security Concerns
- March Banking Customer Concerns
- Potential for March Divestiture
- CFIUS Risk
- March Networks Response
- The Trend of PRC Government Takeovers
Infinova **********
******** ***** ** *** ******** ***** exchange ** ****,******* * ******* (*** ***** ************ standards) $*** ******* *** ***** *** valued **** ** ~$*.* *******. *******, the *******'* ********* *** ********* ** the **** ******, ******* *** ********* of *** *** ***** ************ ******:
***** ********'* ******** **** ***** *************, multiplying **** ***** $** ******* ** 2009 ** ***** $*** ******* ** 2018, **** ****** *** ******* ****** on ************ ** ******** ***** (***** ******** ** ****,***** ** ****) ****** **** ********'* *** ************ business. ******** ************* ******* ******* ********* ******* **************** ****, *** **** ****** ******* Infinova $*** ******* ** ***** **** year *.*. ****** **** ** ********'* entire *******, ********* ** ********'* **** annual******.
Profitability *********
***** **** ******** ******** *** ******** in ******* ****** *** ********, ** has *** ********* *************. ********'* ********* disclosures **** **** **** **** ** the ***** ***** ******** ** ****, Infinova **** ***** $*.** ******* ** sales *** * *** **** **-$*.** million ** **** ****.
**** ****** ** ******** ** ********** China ************ ************* **** ********* *** Dahua, *** ****$*.** **********$*** ********* ******* ** **** ************ (******** to $** ******* *** ******** **** year). ******** *** ********* ** **** a ******** ** *** *** ********** surveillance ****** **** ***** ***** ***** at, ****** **** "******** ** ** American *******" ** ***** ****** ********** **** ****.
Founder ******* *** ** ****** *********** ***********
** * ******** ******** ***** ********************, ******** ****** **** * ******* called******** ********** *********** "****** *** *********** *********** ** the *******" **** ********* *** ****** rights **** **.**% ** ********'* *****.
**** ******** ***** *** ****** *% of ******** *** ***** $** ******* (343 ******* ***) **** * ***** company ********** ** ******** *** *** founder ******* *** ********* ******** ***. (*** ******* ***** *********** ******** stock, ***** ** ***** ****** ** 2018.) *** ******** *** **** **** up ****** ****** **** **** ** its *****, ****** *** *** *********** shareholder.
SIH ***** ** ***** - **** ** *********
***** * ***** ********** ****** ***** to ******* ********** ** ******** *** the *********** "******* *** ****". ** is******* *** ******** ********* ***** ** State-owned ****** *********** *** ************** ********** of *** ***** *******.
************* ** *******,******* *** ******* *** ******** ****** that ******** *****'* ********* *****-***** ********** sector. *********'* *********** ***********, ******, ****** ***** ***** ** *****.
Official ********* *** ****
********* ************** ******** **** *** ***** **** Infinova ** * ****** ** ****, such ** ********* ********** *** ********** projects:
** * *********** *********** ** *** target ******* [********], ******** ********** ******** will *** *** ********** **connect *** ****** ******* **** ***'* *****-***** ****** ****** *** *** ******** ***** ** *** ****** ******* (********* ***** ****, ***** ****, ***** ****, ******* *********, ********, ***.) ** ****** *** ****** ******* ** ********** ******** ********; it will use the resource advantages of Shenzhen Investment Holdings and its subsidiaries to assist the target company in developing relevant business; the advantages of investment and [SIH] funds and financial resources to assist the target company to expand *** **** ****** **** *** ****** ******* ******* **** ***** ********* ************, *********** ********** *** ****** ** ********* *** ******** ********* *****. [emphasis added]
******** **** ** * ******** ********, stating **** ******** ** "*** ********** by *** *** **********" *******:
*** *********** ** ******** ** *** SASAC. ** ** ***, ** ********** holding ******* ***** ******* ** ** support ***** *********** ** ******** ** investing ** ***** ***********. *** ** owned ** ******** **** ********* **********. By *** ** *******, *** ** similar ** * ********* **** ** the ***, ***** *** ******** ** a ************. *** ***** *** ******** a ********* **** ** ** ***** or ********** ** *** ******* **********.
*** ** * ********-****** ********** ******, and *** ********* **** ******** ** financial ********** ****. ** ***** ********** as * “*********** ***********,” *** ** able ** **** ** ********’* ********** into *** ******* *******. **** ** important ** ***’* ********* ***** ** ** ********** holding *******, **** ****** ** ***** holds ***** ****** **** *** ******** shares ** **. *** *** ***.
*** ** * *********** ****** ** the ******** ** ******** ********** ** Dr. *** (*.*. **. *** *** JHL). *** ****** *** ********** ** Infinova ******* *** ********* **** ********** the ****** ****** ********** **** **** of *** ******, ******* ** ******* conditions.
******** *** ************ ** ******** *** operating *** ********. ** ************ ****** in *** ****** ********** ** *** link *** *****, ** **** ************ is ********, **** *** ****** ****** of *** ********* ****** **** ** restored, *** **** **** ********** ******, and *** ******** ** ******** **** regain *******.
** *****, ******** ** *** ********** by *** *** **********.
******** ******** ******* ****:
- ***’* ********** ** ******** ** ****** financial.
- ********’* ********** ** ***** ******** ** also *********.
- ******* *** (* ** ******* *** resident) ** *** ***** ******* ******* of ******** *** ** ** ****** of ********’* ******** ******* *****.
- ***** ** ** *********** ** ******** of **********, ********, *** ********** ******* March ******** *** ********’* ********* ** China. ***** ******** *** ******** ** a ********, ********** ******** *********** ** any ********* **** *** *** **** continue ** ** **. *** ********* of *****’* ******** ********* ** *** affected ** **** ******.
******** **** ********* ****** **** ***** surveillance ********:
****** **** **** ** ****** *****, Infinova’s ******** ** ***** ************ ** China *** ********** ** * ********** level ** ***** ** ********’* ******* and **** **** ** ** ***** of ****** ***** ** *****. ******** in ***** ** *** * ******* marketing *** *********** ******* *********** *******.
Analogy **********
******** **** **** **** *** ** not ***** ** ***** *** ** the ***** **********, ******* ** * municipal **** ** *** ***. *******, SIH ** **** ** *** ******** SASAC, ***** *** ******** ** *** ******* ** *** website.************, ********'* ********** ***** *** **** that ****** *** ***, *** *** is * ******* ***** ** * single ********* ***** **** ******** *** levels ** **********.
**** ***** *****-***** ******** - **** local **** - **** **** ***** loyalty/obedience ** *** ********* *****, *** they **;*** *** *** *** ***** ************** ********* ******* *** ***** *** its ********* **** ****** *** *******, for *******:
- ******* ** *** "********** ***** ************ *** ****** ******* ** ********* reform *** ***********", ******* **** "*** new ****** ** ********* ********-******"
- ******* * "******* ******** *****" ** "** ***** *** ********* the ********* ****** ** ******* ********* Xi"
- ******* ** "***** *******" ** *** ****** ** *** Hong **** ******** ** ******* "*** security ********* ****** ********" *** ****** employees ** "****** ** ********" ******* "external ******* ******"
- *** *** ***************** *** **** ********** *** ******* ********* ***** ***** urging ********* ** "****** ** ********* thinking **** ******* *************** ** *** new *** ** ** *******"
Focus ** "******* *** ****" *******
** ** **** ***** **** *** does ******** **** ***** *** *** government's *****, ***** ******* *** **** to ***** ** *** ********* *** "******* *** ****" ****** ******** - * *********** ** **** ********** ** **** Kong*** ***'* **** ****** **** ** the ******* ********.
** *** ******** ******************, ******** **** ** ***** *********** with *** ** ******* *** **** projects:
** *** ******, *** ******* [********] and *** **** ********** ************* ** the *********** ** ***** ********** *****,the *********** ** *** *********-**** ****-***** ******* *** ****, and will work closely with other portfolio companies of SIH and SASAC regarding collaboration and capital support, in order to achieve a win-win [situation] and build a future together.
March ******** ********
***** ********, ***** ** ***** ***** ** Infinova, *** **** ****** ** * difficult ******** ***** ** ******** ***** surveillance *** ***** ** ********** ******* clients ("**** **** *** ***** *** credit ******" *********, ******.)
***** *** ********* ****** ** *** data **** *******, **** ******* *** be ********* ** ** ******* ******** with ***** ******** *** ** *** parent ******* ****** * *** ********** entity ** *** *********** ***********. *******, this **** ** *********** *** ***** US ***** ** **** **** ******** or ********* ** ******** **** ***** recorders.
March ******** ********
***** **** **** **** **** ***** "continue ** ******* *************". ***** ** their **** *********:
************, **** ******* ** ***** ********, we **** ******** ** ******* *************, just ** ** **** *** **** 8 ***** ***** ***** ******** ** US-based ********. *** ************ *** ******* the ******* ** **** **** *** top-line ******* *** ************* ** ****** years ***** ********** ** *** ***** of *** ****** ********** *********. ** fully ****** *** **** ***** ** independence ** *** ******.
***** ******** ******** *** ******** ** our *&* ******* ** ****** *** Italy. *** ** *** ************ ******** is **** ** ******. ***** ** no *********** ******* ***** ******** *** Infinova *********** *****.
*** ******** ** *** ******** *** manufactured ** *** ************** ** ******** by *** ****, **********-***** ******* (******: SANM) - *** ****-**** ************* *******. Together, ** **** ********* ******** *** industry’s **** ********, *******, *** ****** Linux-based ********* **********.
*** ********** ********* ****** ****** ***** solutions *** ** *** ********* **** March ******** **** ******** ** ******* on ***** ***** **** **** *** future.
Divestiture *********
** *** **** ***, **** ***** divestiture * **** ********** ****** *** March.
** ******** ** *** ********** *** March's ******* *********, ***** *** ** strong '*********' *** ***** ** ** part ** ********. *** *******, *****'* video ************ ******** ** ** *** opposite *** ** *** ****** *** Infinova's ***** ******* ********* ****** ** of ** ******* ** *******-******* ***** Networks.
******, *** **** *** ***** **** demonstrated ******* ****** *****' *********** ******** in ******** ******** *********. *****, ** still * ******* ****** ** ***** niche, ***** ****** **** *******.
Potential ******** ******** ******** / CFIUS
*** ** ********** *** * ******* committee ***********(*** ********* ** ******* ********** ** the ****** ******) ***** ******* ******* is ** ****** *********** ********* ******* investments **** ** *********, ********** ** they **** **** ******** **********/**** *** foreign ***********.
******** ******** ** **** **** ** it *** ******** ***** ** **** transaction, ******:
** ****** ******* ** ******** ***** matters.************* *** ***** *********** ********* *** we **** ****** **** ******* ** ensure **** ** *** ** ********** with ********** **** *** ***********.
**** ******* *** ** ***** ****** if **** *** *** ** **** not ******** * ******** ***.
************, ***** *********, ***** *********** ** possible.****** *********, * ******** ****** ** *** Peterson ********* *** ************* *********, **** IPVM **** "***** *** ****** ****** a *********** ** * ******* ******* takes * *********** ***** ** * US ********."
** ********, ***** ** ****** ** take ** ******** ** *** ******** is ********** **** * ******* ********** (which ** **** ***** *** **** trigger * ********* ****** ** *****), if *** ********** *** ** ******** provides ***** ***** ****** ********, *** if *** ** ******** ** * supplier ** *** ** ********** (********** in *******) ** ** ** ******** infrastructure.
The ***** ** *** ********** *********
******** ** *** ****** ******* ** the **** *** ****** ** ** taken **** ** * *** ********** entity. ***********'* ******* *** ********, ******* ******** state-controlled. ***** *** ***** *** **** a ******* ******* ** *** *** government ******** ** ** **** *** firms **** ********* ************ *** ** China's ************ ********** ************* **********.
**********
**** **** ***** ** ******** *** Infinova ** *** ******** ***** *** company ****** ********* *** ********** ********, as ** *** ******.
*******, ** ******** ***** *** ***** Networks *** ** ********** ** ********** client ******** **** *** ********** *******.
*** **** **** ******** * ********* legal ***** ** ***** ******* ** step **.
**** *******, **** ****** ******** ***** what ***** '*******' ***** ********* *** taken **** ****.
*******, ********* *********!
*****'* **** * ****** **** *** last **** ***** **** *** ********** in ********** ******* ** ******* '*******' PRC ***** ********* *** *** ********** created ********* **** *********.
**** *** ********** *********** ****** *********** ******** ** '*******' companies **** ****** **********-**********.
***'* ****? *** ** *** *** an ********** ***** ** *** ********, how **** ** *** **** ** factor **** ******** ****?
**** *********** **** ******. ** *********** to *** *** **** ******** ******* and ** ** **** *** ********* fall *** ** *** *****.
*** ** *** *** ** *** out!
* *** ********** ****** ** *** the *********** *********** ** ** ******** manufacturer ******** ** **** ** *** wholly-owned ********** ***** ********, **** *** confirmed.
******** **** **** **** "******** ** not ********** ** *** *** **********"
* **** ***** ***** ** * "controlling ***********" *** ****** *** ******* over * ******* **** *******. *** then ***** * ** **** ******* my ************** ******** ** **** **** I ***** **** * ***** ** salt.
***** ** * "*********** ***********" *** having *** ******* **** * ******* they *******.
** ************* ** ***** ***** ** that **** (*** / **** / PRC **********) ** *** **** ** 'control' ******* **** *** *** ***** customers ** **** *****'* ********* *** doing ** *** ** *** ****** inside ** ***** ********'* ******** ** access ***** ********'* ******* *******.
**** **** (*** / **** / PRC **********) ********** **** ** '*******' such ******* ** ********* **** **** in *** **** **** ********** ******** over.
* ***** *** **** ****-**** ******** is *** ******** ** ****** ***** Networks. *****'* ********* ******** "** **** ******** ** ******* *************" and "***** ** ** *********** ******* March ******** *** ******** *********** *****.". As ****, **** ******* ** ** keep ***** ** **** ** ********?
* ***** **** *** ******** ******************** "******* ****"?
** ****, **** ******* ** ** keep ***** ** **** ** ********?
* ****** ** ******** ***** *** enough *** ***** ******** ** **** them ***** ******* ***. *** ***** buy ****?
* ****** ** ******** ***** *** enough *** ***** ******** ** **** them ***** ******* ***.
******* * **** ********* ******** ******* - **** ** *** ***** ** future ** ***** ****** ** *** gov *********** *********** ********? *'* ***** they **** **** **** ******* ***** inside ******** **** ******* **** ***.
** *** **** **** ********, **** **** ********* *** **** management ******** ****** *** ***********:
** ******** / ***** *** ********** argue **** **** *** ******* * real **** ******* *** ******** ** a ****** ************.
*** ***** *** ****?
*****'* * *** ** **** *** there. ******* ****** *******. ******** ****** Pelco. ***** ** ** ****** ***** than ***** ********* **** **** **** sold.
* ***'* **** **** ***** ***** or **** ** *** ** ***** et **. *** "***, ** *** ready ** **** **** ******* *** lead * ***** *********** *****" **** will **** ******. ***** ** ****** a ********.
*** ********* *** ******** ** **** keeping ***** ***** ***** *** ***** to **** ************* ** ***** ********* start ** ****.
* ** *** *********** **** **** be * *********** ***** *** ******** / ***** *** *****'* ********* * path ** *********** **** *** ** in *** **** ********* ** *** involved.
***** ** **** ** *** ***** think ** * **** ** *** West.
**** *** ** ** *** **** to ****** ***** *** **** ******** or ** ******* * **** ********, the **** ******** ***. ** **** not *** *** ********** **** ***** pipeline, ** **** *** **** **** to *** ** **** ********, *** it *** *** ***** ** **** and **** ********** *** *** ** you ***'* ******* *** **** *** on ********.
*** **** ** **** ****, **** can **** *** **** *********, *** if ***** ** *** ****** ** their ********** **** **** *********...
* ********** ***** **** ** ** far ******* ** ***** **** ***** is * ********** ****** ** **** evil **** ** *** *** ** control *** ***** ******* ** *******. Any ******** **** ***, ***** ** infinova ******* *** ******** *** ******* of ****** *********** *** ** ******* down. ***********, ****** ***** ******** **** China ***** ** ** ***** **** at *** *** ** *** *** it ** * ******* ***** ** one-party **** *** **** ****** ******, regardless ** **** *** *********** ***** holder ** ***.
** *** **** ***** *** *** government, **** *** *** ********, ***** are ***** ****** ** ******* *** there.
***** ** **** ** *** ***** think ** * **** ** *** West.
**, ****'* *****. ***** **** *** even ***** ** ****** **** ***. Don't ******* **. ****** ***********'* *** ******* ******** ********** ********:
** ** ** ********** ********* ************. Including ************ **** **:
**** * ********** ****, ***** *** an ******** ** ********* *********** *** unlike * ********** ****, ***** *** an ******** *** ******* ****** ********* purpose.
** ** **** ** ***** *** far *** *** **** ** **** using *** ****** *** "***** ** * **** ** *** West" ** ****** * ***** *******.
* *** ******* ***** **** *** Nikkei ***** ****** ****** **** ***** -**** *******? ***** ************ ********* **** with *** ** ** - ****** Asian ******, *****:
* ***** ** *** ****** ******* companies ******* ********* ** ****, ******* 60% **** **** *** **** ****** due ** *****'* ******** ********, ********* to *** ***** ********** *******, * newspaper ****** ** *** *****-*** ****** News ******.
** ***** **** ******* *********, ** companies, **** * ******** ****** ************** of ***** $** *******, **** ******** by *****-***** ********* ** **********-*** ********** companies. **** **** ******** ** ****** strategic ****** **** ************ *** *********** systems.
**** **** ******* ** **** ******** and ******* **** *** ********:
******** ********, ****** ** * ******** government ********** *******, ******** ***** **** surveillance ******* *** *** ***********. *** products **** **** **** ** **** 100 *********, ********* ** ***** ******* and ******.
******* ************ ****** ********, ******* ************, was ******** ** ******* ********'* ********** arm.
**** **** * **********, ***** *********** product ********** **** *** **** *********** processing ********/****** ** *** ****. ***** teller **** *** *** *********** ** captured *** *** ********'* **** **** recorded ***** ** **** ** *** transaction.
**** ***** ****** ************ ** ***** were * ************* ** **** *******. This **** **** ****** *** **** of ****** * **** **** ** buffer ******** ** ****** ** ** camera.
** *** ****** ** ***** ** to **** ***** ******, ****** *** transaction ****** ** * ***** ****.
*******. ***** ***** *******!
**'* "******" ** ** ***** *** always **** * ******** ****** **** from *** *** ** *** *.*.*. to *** ** *** ********** ********* in *** ****** ********** **** ***** has ********* ******* ******** *** ******* in. ;)
* ***** ** ** ***** ****, well ******* ********, **** *** ******** took ****** *** *************** *********** *** *.*.*.'* **** **** ***** and **** *********** "******* *******" **********, and **** ** *** ******* **** companies **** ******** **** ***** ****** a ****** ******. * ****** ***** "security" ****** **** **** *********.
* ****** *** **** *********** *** be ********/******? * *** ** ** distributors/manufacturers, *** *** ****** ***** *********** & ********** **** ******** ****, *** conversing ** **** ***** **** ** IPVM ** *****, *** **'* ******* the **** ******** ** ********* *** end-users ***'* **** *** ** **** care.
** ***, ******, ***** ** ** merely * ******* ** ********* & awareness? **** ** ******** ******** **** about **** (***** *** ***** ***** problems) **** ****'* ********* ****?
**'* "******" ** ** ***** *** always **** * ******** ****** **** from *** *** ** *** *.*.*. to *** ** *** **********
******* ** ******* *** ********, *** strategy *** **** ** "**'** ***** to **** *******, ** **** ****** dangerously ***** ****."
*** *******, **** ******* ***, *** founder ** ********, *****'* ** ******** that ** *** ******* ** ***** to **** * *** ********** ****** the *********** *********** ** ******** *** given *** *******'* *********** ********* **** was *** **** **** ********* ** him.
********, **** *** **** ** *** dumping **********, * ** ***** * lot ***** **** *** *** / CCP *** *** ********* **** *** implicit ******* ** **** *** ****** 3x *** **** ** *** ***** forever. **'* ******** ******* ** *** think *** ****** ** ***** ** grow **% *** ****, ***** ****, to ****** ** **** **** ** super *********, ********** *****-******* *** ****** maximization. ************* *** *** ** **, it's ******** ***** ***** **** ** was * *******.
* ***'* ******* ** ******** **** Netposa *** ********'* ****** ** ****, but * *** ********** **** **** judgements & ******* ***** *** ***'* points ** **** *** *** **** would **** ** ******* ******* ************ Properties *** ************/********* (********** ********* **** are ******** ** **** ******* ************).
* ***** ** *** ***** ** anyone **** *** **** **** *** "right ***" ****** *** **** ***** it ******* *** * ****** **** it *** * *******. ******** **** the ******* ********* *** **** ***** two ** ***** ***** ***** **** we *** ****** **** **** ***/**** what ***** **** ** *** ********, and ********* ** ** ** *************.
*** ********* ******** ****** **** ***** was ******* *** *** ********. ** also **** **** ***** *** ******* the ***** ******** ** *******. *** wouldn't **** ** ** ** *** industry? **** *** ****** **** ********* gets ****** ********* **** ***** ********** (I ***** *** ******** $* ******* in *** ****). ** **** *** a **** **** ***** **** ******* companies ** **** ****** *** "** business" ***** ********* **** *** ** expense **% ** ******* ********/***** ** doing ********.
** ****** **** **** *** * fact, ** ***** ** *** ***** if *** ******** * **********, **** Hikvision *** ***** *** *********/**** ******* in *** "******* *******" ********. **** own ******** ** ***** ********* **** to *** ****** ***** ****.
* ****** ** ******** ********* *** win * ******* ** *** ****** could **** ** ******? ** **** of ***** ** **** **** * can *** ** *** ** ******* device **** ***** ******** ** * metallic *** ***** ******* *** ******* than * *** *** **** ****** and *****...
*** ******* ** ** ******** ********* Maker | *** *** ******: **** ******* *********** * ********** furniture ******* ****** *******-*******. ** ****, he ********* *** ****** ** **** was **** *** *****’* ******* ******** against ***** **** “*******,”the ******* ********** ******* ******* ** *** *.*. that *** ****** ***** **** *** cost ** ***** *********. ** ***. Vaughan-Bassett ***** ** **** *****-*** ******* dollars ** ****-******* ******.
**** ****** **** ** * ***-******* vms ************ **** ** ***** ***** (and, ********** ******)?
****'* **** ********** ** ********** ******?
**** (***!) **** *****, *** **** produce ****-*** *** **********.
*********** ****** *** *** ** *****. If *** *** ** ** * Raspberry **, **'* ****.
***** *** ******* ***** ********** **** that *** ********* ** **** **** discussion:** ****** ***** *** *****, *** Windows-Based
**** *****... **** ** ***** ** be * ***** **** *** *** industry ;)
******* *****\****** ****\** ********. ***** ** well, *** ********* ** ****** ********, might *** ** ********** ******.
*** *** ** ***** ************* **** using ***** ******** ***, **** *** consider *********.
********* *** ** *** ******** *****:
**** ********* **, ** *** *** least, ***** *** ***, *********, ***** cybersecurity ********, ***.
**** *********** *** *********** *******. * have ****** **** ******* *** *** recent **** **** ***** ******* *** Owned ******** ********** ** ***** ******** companies.
* ****** ** ***** ***** ******** the ********* ** ********* ************ ** the *** **** ***** ********, ******** private, ** * ******* *** ******** infrastructure? ******* ** *** ** **** respond ** **** *********.