Kevin O’Leary warns that TikTok’s fate could be determined by a ‘secret golden share’ that gives Beijing veto power

TikTok’s fate could be left up to Beijing thanks to a “secret” arrangement that gives the Chinese government leverage over any potential deal involving the platform, “Shark Tank” investor Kevin O’Leary told FOX Business on Monday.

“There is something called a secret golden share that every Chinese company must issue to the CCP leadership. It is Xi [Jinping] itself and it turns out that ByteDance can’t negotiate anything unless it has made a decision,” said O’Leary Ventures president “Morning with Mary” guest host Cheryl Casone.

“Secret shares are veto rights over all other shareholders,” he explained. “They do not have any rights after issuing the secret share, so now we are deciding what to do with the secret share, because until it decides what will happen, it does not matter what the shareholders or the chairman of the board or anyone from the board think, that is irrelevant. Secret golden share now determines the fate of TikTok.”

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As The New York Times explainedin this arrangement, “the Chinese government buys a small portion of the company’s equity in exchange for a seat on its board and the right to veto certain company decisions.”

Speaking on the subject later on “Varney & Co,” O’Leary said the news may come as a surprise to other investors involved in Chinese companies.

“They’re all subject to the owner of the secret gold stock, and I think that’s against some US securities laws if you’re listed on the New York Stock Exchange, NASDAQ or any other exchange,” he said.

“The word here in Washington today is that Lindsey [Graham]… will very soon introduce a bill on this because we have learned a lot through this situation with TikTok. No deal yet. This deal is now in Trump’s hands and it will be his deal. Unfortunately, the 90-day extension option is not currently in the current law. So Congress will have to modify it. And the ability to own any Chinese property is disallowed by the Supreme Court’s 9-0 decision. So … our hands are tied as buyers and we will have to abide by the law unless President Trump can change it.”

TikTok, however, countered that “an entity linked to the Chinese government owns 1% of ByteDance’s subsidiary, Douyin Information Service,” and said the holding “has no influence over ByteDance’s global operations outside of China, including TikTok.” according to Reuters.

A popular platform for short videos has gone dark for millions of users across the US late Saturday after the Supreme Court, citing national security concerns, upheld bipartisan legislation signed by President Biden last spring that required the app’s China-based parent company, ByteDance, to sell the platform or face a US ban.

While it was briefly blacked out, the app included greetings to Trump, who previously said he would “most likely” give TikTok a 90-day extension from Sunday’s deadline after taking office.

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The app returned a few hours later, but its future remains uncertain.

Just minutes after the Supreme Court’s ruling, O’Leary made a $20 billion cash bid for the app, arguing that a sale to a US syndicate was the “obvious solution.”

He told Casone that he had no negotiations with ByteDance thanks to the “golden share”.

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Alexandra Koch, Bradford Betz and Landon Mion of Reuters and FOX Business contributed to this report.