ITWire

'Week in China' - a news web site - said that the disappearance of Caijing Magazine - which it described as a respected national business publication - was unusual even by Chinese Standards and suggested a Government order as the most likely explanation.

"After appearing at airport bookshops and some news-stands on Sunday, the issue was recalled the following day...[The publisher's] explanation to distributors was that it was due to 'technical reasons'," WiC said.

WiC was able to buy a copy before the magazine disappeared and reported at length on the Huawei article. Its conclusion is that despite the claims of employee ownership control still rests very much in the hands of founder Ren Zhengfei.

"[The article] touches on a raw nerve – the question of who owns the company. Ask company bosses, and the response is that the employees are the owner," it said.

"But Caijing's investigation seems to highlight something rather different: there are actually two shareholders, Huawei Holding (an employee union with about 99 percent of the equity but controlled by company founder Ren Zhengfei) and Ren Zhengfei himself, with the remaining one percent. Employees buy into the virtual stock and are paid a dividend. But they have no actual ownership rights."

It adds: "Corporate spokespersons have been careful not to over-represent the ownership terms in the scheme. Bill Plummer, vice president of external affairs, told an industry forum in March that Huawei was 'an employee-owned company' but went on to say that these are not 'grants of stock' but 'grants of the opportunity to purchase stock'.

"But Caijing's article peels back much more of the detail on how the employee incentive scheme has been working over the last decade. And the underlying point is that company founder Ren continues to stand behind everything at Huawei. Profits are shared but the implication is that controlling power lies in Ren's hands."

Share options for Huawei's Australian employees?
India's Economic Times newspaper reported last month that Huawei had said it was considering extending its employee share ownership scheme to non-Chinese employees. The paper quotes Scott Sykes, vice president of Huawei media corporate affairs, telling Indian journalists: "Huawei is neither a state- owned nor a public company but it is owned by it employees. The company is considering opening the option to non-Chinese."

According to Huawei's web site, it has 140,00 employees, 80 percent of them in China. The Economic Times added: "Scott Sykes did not elaborate on when or how the current shareholding structure would be extended to overseas employees."

iTWire sought further details of the plan via Huawei Australia but the response was that no further information would be provided.

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