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Comment by yed | Hacker News Reader

No, it only applies to entities where China has a controlling interest. If you buy Chinese hardware that doesn’t make your company Chinese.

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No, at 3:50 in TFA the bill defines holding as: i. an equity interest, ii. a stock, iii. a security, iv. a share, v. a partnership interest, vi. an interest in an LLC, vii. a membership interest, or vii. ANY participation, right, or other equivilent, however designated and of ANY character (emphasis mine).

That's a lot more broad than "Chinese controlling interest".

Edit: and "controlling interest" as defined in the bill means "a holding with the power, whether direct or indirect and whether exercised or not exercised, to determine, direct, or decide important matters affecting an entity." which is much more broad than the commonly understood 51% equity stake.

Right, there’s no lower limit at all based on this language - it could be a single share.

I mean… as far as I can tell, the definition is so broad and vague that it would even cover a Chinese firm holding a US public stock.

exactly. Or there's a person of slight Chinese origin in your management team.

Holding a minority of common stock does not give you the power to “determine, direct, or decide important matters” so no, it would not cover that.

Actually even minor stock holders can get to vote to decide important matters, so yes, it would cover that.

Further than that, many decisions are probably in practice made by minor stockholders as big pension funds, bank run index funds, etc have neither the will nor expertise to get their hands dirty.

This is why corporate raiders can gut companies by buying into them, replacing boards and/or force them to huge divestments, loans and finally dividends, and then when finished leave a husk of the company back to index and pension funds that just buys mindlessly to retain their index balance (even if the company has no real long term future).

As of 2021 institutional investors avoid getting their hands dirty by only voting about ninety percent of their shares. Individual investors show their “expertise” by voting a bit under thirty percent of their shares.

Say, when the corporate raiders buy a bunch of shares, how come the institutional investors still have theirs? That seems odd…

“determine, direct, or decide important matters” is what makes this specific. This is no different than the traditional definition of “controlling interest”. The meaning of “controlling” in this context has a long legal precedent that is not overridden by this bill.

Edit: as a concrete example, I do not have a majority share in the company I work for but legally I have a “controlling interest” because I am an executive as well as owning shares. I know this because that is how I am required to fill out financial declarations.

> The meaning of “controlling” in this context has a long legal precedent that is not overridden by this bill.

Thank you. I am not a lawyer but watching all the internet panic over this bill has had me wanting to smash my head against a wall. I don't think people understand that our legal system is based on precedent* and not just whatever broad argument an internet person wants to make based on their own selective interpretation of the terms.

(*As long as we're not talking about voting rights or abortion.)

I am for banning tiktok, but this bill seems to enable significantly more than that. Why shouldn't I be concerned about that?

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