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An executive at Tencent Holdings Ltd., China’s most valuable publicly traded company, was arrested by Chinese authorities as part of an investigation into a high-level corruption case involving one of the country’s former police officers, people familiar with it. with the subject said.
Zhang Feng has been under investigation by China’s anti-ship inspector since the beginning of last year for alleged unauthorized sharing of personal data collected by Tencent’s social media app WeChat, people said. They said Zhang was suspected of handing WeChat data to former Deputy Public Security Minister Sun Lijun, who is being investigated by Beijing for undisclosed violations of Communist Party rules.
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The investigators are looking at the types of data that Zhang may have shared with Sun and what Sun may have done with them, people said.
Hong Kong-listed Tencent, which has a market capitalization of around $ 900 billion, confirmed on Thursday that Zhang is under investigation. The case “is related to allegations of personal corruption and has nothing to do with WeChat or Weixin,” a spokesman said in a statement to The Wall Street Journal. Weixin is WeChat’s sister app for the Chinese market.
Zhang was referred to as a vice president of Tencent in a statement released by the municipal government of Zhangjiakou, a city near Beijing, in which he was described as having met with the city’s mayor in October 2018.
Tencent said that Zhang never held a senior executive position at the company or a managerial position.
It was not possible to determine where Mr. Zhang is now. He was not found for comment. Mr. Sun did not respond to a request for comment sent by China’s anti-ship inspectors – the Central Commission for Discipline Inspection – and the State Council Information Office.
WHAT IS TENCENT?
Zhang’s case highlights how China’s biggest technology companies can engage in political battles at the highest echelons of the Communist Party of China. Companies like Tencent have access to coveted data, as well as information about the users who provide it. Beijing’s concerns are growing that technology companies may misuse this data or share it inappropriately, even when officials sometimes demand access to it for their own purposes.
Anti-corruption inspectors were silent about Sun’s alleged crimes, saying in April that he is suspected of breaking the law. He is one of the most important security officials investigated since Chinese leader Xi Jinping launched a comprehensive anti-corruption campaign against law enforcement officials last year.
Authorities have not confirmed that Zhang is under investigation.
As Zhang’s investigation unfolds, Pony Ma, Tencent’s billionaire founder and chief executive, was not seen publicly in mainland China or personally at major public events. He has spent most of his time in Hong Kong, people familiar with the matter said.
Mr. Ma was not charged with any wrongdoing. He did not respond to requests for comment. The Information Office of the State Council of China and the Central Commission for Discipline Inspection did not respond to requests for comment.
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Zhang joined Tencent in 2018, according to people familiar with the matter. Born in 1968, he spent most of his career in a department of the Central Committee of the Communist Party overseeing the appointments of senior party officials, according to records on the stock exchange of a state-owned company listed in Shenzhen where he worked before he joined. switch to Tencent.
As a Tencent executive in charge of government affairs, Zhang met with Chinese government officials and was responsible for looking after the company’s relationship with ministries in Beijing, according to one person.
Tencent’s WeChat mobile app is the predominant social media platform in China. Its online chat and payment functions make it an indispensable part of the daily life of hundreds of millions of Chinese people.
Over the years, Tencent has collected a treasure trove of data by processing the chat conversations and financial transactions of its 1.2 billion monthly active users, most of them in China. This made WeChat a powerful surveillance tool for the Chinese government, which regulates Tencent and regularly suppresses differing opinions about WeChat, the Journal reported.
More recently, however, Chinese authorities have grown increasingly concerned that data collection systems from Tencent and other technology giants will give them a unique insight and power over Chinese society, challenging the Communist Party’s desire to monopolize such information. In recent weeks, China has launched new antitrust rules targeting internet platforms, which analysts say are partly motivated by Beijing’s attempt to regain control of users’ personal data.
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Ma’s lack of public appearances – in the wake of China’s recent crackdown on another billionaire businessman, Jack Ma, who is not related to Pony Ma – has raised concern among current and former Tencent employees about why the company’s founder was not seen at events.
The last publicly documented personal sighting in mainland China of Mr. Ma, who also goes by his Chinese name, Ma Huateng, was in August 2019 in Shanghai at the World Conference on Artificial Intelligence.
Mr. Ma has only made virtual appearances at Tencent’s year-end meetings across the company since December 2019 – a break from his usual practice of attending these events in person. Officials have been informed that Ma is recovering from a back injury. Mr. Ma, a representative of the National People’s Congress, did not attend last year’s legislative procedures in May, citing health reasons.
Although face-to-face meetings were largely resumed in mainland China in mid-2020, Ma missed a ceremony in October that marked the 40th anniversary of China’s first special economic zone in Shenzhen, where Tencent is based.
Meanwhile, Mr. Ma, 49, participated – at least by audio – in quarterly conference calls. In November, he gave an audio speech at a philanthropic event.
Mr. Ma’s lower profile had little impact on Tencent’s operations, whose revenue and share prices reached historic levels during the pandemic, as home users migrated to his video games and digital services.
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Tencent is now China’s most valuable publicly traded company, having overtaken e-commerce giant Alibaba Group Holding Ltd. in market capitalization most recently in December.