Translator:Christine

The Chinese music market has been sluggish for many years due to the prevalence of piracy. In recent years, with the rise of online music, Tencent has monopolized the market for Chinese online users. With the considerable traffic resources of QQ and WeChat and the ability to integrate multiple channels, Tencent Music has gained the right to bind to record companies’ copyrights. After purchasing a series of exclusive music copyrights at low prices, Tencent Music began to dominate the market, and its share in the Chinese online music market once reached 80%. The company’s products and brands include QQ Music, Kugou Music, Cool Me Music, and Karaoke for All. Tencent Music also holds the highest market share in the music-derived social entertainment services market, at 69.4%.

Yet since March 2021, Tencent Music (TME) shares have been diving high on the US New York Stock Exchange, plunging wildly from a high of $28.80 to around $4, leaving no return for investors’ hard-earned savings.

According to Miles Guo’s revelation on May 1, 2022, Tencent Music cheated billions of dollars after listing on the US New York Stock Exchange. The manipulator behind it was the Taiping Alliance: “You see my bankruptcy case, Wu Zheng was the payer behind it, Wu Zheng is behind Tencent now, and Taiping Alliance is behind Tencent Music. The Pacific Alliance made billions of dollars from it and then sold it to Spotify after the share price vaulted up, and then Tencent almost went bankrupt. This money laundering case is fraudulent in the US. How big do you think it is?”

In 2016, Chinese music company CMC merged with QQ Music to form “Tencent Music”. Since Shan Weijian’s Pacific Alliance (PAG) invested $100 million in CMC in 2013-2014, PAG became the first investor in Tencent Music.

In 2018, Tencent Music Entertainment Group (TME) planned to list on the NYSE in the US, proposing to offer 82 million American Depositary Shares (ADSs), or 164 million Class A ordinary shares, at $13 to $15 per share, implying an initial public offering raising to $1.23 billion. On December 12, the opening price of Tencent Music on its first day of listing was 14.15 US dollars, and the closing price was $14.00 US dollars, with a market capitalization of approximately $22.894 billion US dollars based on the closing price.

Most of the Chinese Communist Party (CCP) companies currently listed on the NYSE have adopted a VIE (Variable Interest Entities) structure, mainly because the CCP prohibits foreign investment in vast majority of industries, Tencent Music is certainly no exception. The VIE structure is an opportunistic way for Chinese domestic companies to list abroad. A shareholder of a domestic company establishes an offshore holding company (which can be considered a “shell dummy company”) in the same or similar proportion of its shareholding in the domestic company, either directly or indirectly through a Hong Kong company, and then establishes a wholly foreign-owned enterprise (WFOE) in China, which then effectively controls the domestic company by signing a set of control agreements (i.e, VIE agreements) with the domestic company and the shareholders of the domestic company, and receives the economic benefits arising from the business operations of the domestic company.

According to Tencent Music’s SEC filing, Tencent Music is listed as a holding company in the Cayman Islands.

The Tencent Music shell company has no physical presence in the Cayman Islands and may not even have real offices or employees. Still, it can be a listed company on the New York Stock Exchange as “Tencent Music” and sell its shares to investors under the name “Tencent Music. This seemingly fake “Tencent Music” company has acquired Tencent Music’s assets and profits in China through VIE control agreements. Still, in reality, it is just a shell company with no tangible assets or business. There are significant risks.

Finally, a Hong Kong company called “Tencent Music Entertainment  Hong Kong Limited” can be found through the search. And its financing information shows that the investors are PAG Investment Group (Wang Qishan and Shan Weijian) and China Capital Zhongcai Fund Management (Zhu Rongji family).

The financing of PAG Investment Group and China Capital Zhongcai Fund Management was dated May 1, 2018. The amount of financing was “hundreds of millions of dollars”, just before the listing of Tencent Music in the United States.

It shows that this Hong Kong “Tencent Music” company is most likely a subsidiary of the “Tencent Music” shell company in the Cayman Islands. It is also the controller of the actual “Tencent Music” company in China, which is a money-laundering platform for Shan Weijian and others to steal and cheat.

Source: https://gnews.org/post/p2483742/

Published/Edited by:Lish

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