Chinese watchdog opens probe on Hikvision’s vice-chairman in fresh blow after US trade blacklist

Gong Hongjia and company general manager Hu Yangzhong are being investigated by the China Securities Regulatory Commission

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Surveillance cameras are seen near the headquarters of Hikvision Digital Technology, the world’s biggest supplier of video surveillance systems, in Hangzhou, capital of eastern China’s Zhejiang province. Photo: Reuters

Published: 7:17pm, 14 Nov 2019Updated: 7:17pm, 14 Nov 2019

Hikvision Digital Technology, the world’s largest supplier of video surveillance systems, saw its shares fall sharply on Thursday after China’s securities watchdog started an investigation on its billionaire vice-chairman, Gong Hongjia, for alleged breach of disclosure rules.

Gong, Hikvision’s biggest individual shareholder, and general manager Hu Yangzhong were cooperating with the investigation opened by the China Securities Regulatory Commission, according to the company’s filing to the Shenzhen Stock Exchange on Wednesday.

The regulatory action may put further pressure on Hikvision, which is weathering the Trump administration’s recent decision to add the company and several other Chinese technology firms on Washington’s trade blacklist. That move restricts Hikvision’s access to American hi-tech components, including high-end semiconductors, amid the protracted tech and trade war between the US and China.

The Chinese securities watchdog’s investigation “only involves” the two named Hikvision board members, not the Hangzhou-based company, according to a spokeswoman’s text message in response to inquiries.

The securities watchdog’s investigation was over a new performance bonus plan for Hikvision employees that had not been declared to authorities, according to two people familiar with the matter. The company’s spokeswoman declined to comment on the plan.