If everyone owns <10% then that’s a different story. Tencent can’t control the board alone, but they certain have some latent control.
If a vote splits at 49% in favor and 49% against, the 2% shareholder has all the control.
In practice it might not be enforced that way, but the bill _would_ allow enforcement against reddit. I wouldn’t expect that to mean “Reddit CEO sent to jail”, I would guess the idea is to reserve the ability to force Chinese divestment from basically any tech company in future.
“Controlling holding” is defined in section 2-2
Edit: here you go
(2) CONTROLLING HOLDING.—The term “controlling holding” 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.
Given this, why isn't Section 2-2 also being posted or linked to?
Exactly - by redefining the common meaning of 'controlling holding' to remove any notion of majority stake or voting rights, this definition would apply to any average shareholder who votes in an annual meeting.
From Wikipedia:
> A controlling interest is an ownership interest in a corporation with enough voting stock shares to prevail in any stockholders' motion. A majority of voting shares (over 50%) is always a controlling interest. When a party holds less than the majority of the voting shares, other present circumstances can be considered to determine whether that party is still considered to hold a controlling ownership interest
I'm sure the SEC has an even tighter definition of 'controlling interest' than this, and the bill could have used that definition, but instead it defines a new one.
(A) means […] a controlling holding held, directly or indirectly, in an ICTS covered holding entity by— …
“Controlling holding” is defined in section 2-2
Edit: section 2-2 (2) CONTROLLING HOLDING.—The term “controlling holding” 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.
This bill is a huge transfer of power from the legislature to the executive.
That means that for 4-year blocks, one party gets to control all the interpretations of the various vagaries and ambiguities in the bill and throw people in jail for 20 years. Oppose anything about Ukraine policy? You’re aiding an adversary (Russia). 20 years for you.
This bill is terrifying and much worse than the Patriot Act, which has militarized and politicized law enforcement and prosecution across the country. It’s not just bad, it’s evil.
The Commerce Secretary, however the bill also specifies the legislature's ability to check this via a joint resolution (in both directions, adding or removing from the list). The legislature has just assigned responsibility to a faster acting executive, not totally ceded their control.