Doubts have been cast over the latest TikTok deal after its Chinese owner insisted it will maintain majority control, and Chinese state media claimed that the government will not approve its sale.
Hu Xijin, editor in chief of the Global Times, a state-run Chinese newspaper, said on Monday that Beijing would not approve an agreement between ByteDance,TikTok’s parent company, and Oracle and Walmart because the agreement “would endanger China's national security, interests and dignity.”
ByteDance said on Chinese social media that the newly-formed TikTok Global would be a “100pc” subsidiary, an apparent contradiction to statements made by Oracle and President Donald Trump, who told Fox News that “[ByteDance] will have nothing to do with it, and if they do we just won't make a deal”.
As part of the deal, announced on Saturday, Oracle and Walmart are reported to have rights to buy 12.5pc and 7.5pc, respectively, of a newly established TikTok Global.
Bytedance would own the remaining 80pc. However around 40pc of Bytedance's ownership is private American financiers, which effectively means TikTok Global will be majority owned by the US.
“Upon creation of TikTok Global, Oracle/Walmart will make their investment and the TikTok Global shares will be distributed to their owners, Americans will be the majority and ByteDance will have no ownership in TikTok Global.” Ken Glueck, executive vice president said on Monday.
It is just the latest twist in the TikTok saga. In August, Mr Trump made an unprecedented threat to ban TikTok unless it found an American suitor within 45 days, later insisting that the government should take a cut. Several bidders came to the table including Microsoft, which has since dropped out.
Last week, as Oracle were reported to be in final stages of negotiations, Washington announced that TikTok would be removed from app stores in the US over the weekend, forcing it to announce that a deal had been struck.
TikTok now has a week’s grace as the agreement is signed off however it still requires approval from China, which has said it will stop technology exports of TikTok’s algorithm.
Over the weekend, Mr Trump claimed the negotiations included a $5bn (£3.9bn) “patriotic” education fund for the US to be provided by TikTok, something Bytedance disputed.
TikTok has more than 800m users worldwide and around 100m in the US alone. Its viral music videos have soared in popularity over the past year with 2 billion downloads globally.