Canada to Huawei: do an IPO with us
- Handing Canada what may be the world’s biggest IPO would be a gesture of goodwill that would satisfy full disclosure on finances, governance and ownership structure and help clear the way for Ottawa’s approval of the 5G pioneer
There is finally a voice of reason in the furore over Huawei. Unsurprisingly, it comes from a Canadian, a former ambassador to China no less.
Testifying before a special committee in the Canadian parliament, Guy Saint-Jacques proposed a way forward. The idea is to get the Chinese 5G pioneer to list on the Toronto Stock Exchange with an initial public offering, along with all the full disclosure on finances, governance and ownership structure that a full IPO would entail. “We should tell Huawei we welcome all public companies,” he said.
Huawei has become a nightmare for the government of Justin Trudeau, who came to power determined to improve relations with China and promote bilateral trade.
Instead, the arrest of Huawei’s No 2, Meng Wanzhou, in Vancouver at the request of US prosecutors pending extradition has plunged the country into its worst crisis with Beijing.
In addition to all the diplomatic and economic conundrums, Canada has to decide whether to follow the United States, Australia, Japan and Taiwan in banning Huawei’s 5G infrastructure gear; or to allow restricted use, as with Britain and possibly Germany, which has yet to decide.
Americans have argued Huawei poses an unacceptable cybersecurity risk and that the company has close ties to the Chinese government. Washington has threatened to end intelligence sharing with key allies if they use Huawei’s gear. Huawei founder Ren Zhengfei has always denied any government links and that as a private company, it’s 98 per cent owned by its staff.
Washington’s war on Huawei goes beyond security concerns, but is also an attempt to halt China’s temporary lead in 5G technologies. Nothing Huawei does will satisfy its demands.
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But Canada wants to make nice. An IPO in multiple markets, say Frankfurt, London and Toronto, will significantly improve the firm’s global transparency and standards of operation.
It will go a long way towards addressing major security and commercial concerns of countries less hostile to China than the US.
The IPO idea is, of course, not new. But Saint-Jacques has raised it to the federal level in Canada.
If Meng ends up being extradited, all hell will break loose. But if she wins her extradition fight or the Canadian justice minister unilaterally halts the extradition, relations between the two countries can improve quickly. Handing what may be the world’s biggest IPO to Toronto will be a great gesture that serves multiple purposes. Ren should seriously pursue it.
