IDG Capital works to rebut US ‘confusion’ over its inclusion on Pentagon’s list of companies with ties to China’s military
- The company was surprised to discover its name on the list and said that it had not been consulted ahead of time or asked for information
- The list, updated by the Pentagon last week, does not carry sanctions or other direct penalties
IDG Capital, a venture firm with offices in Beijing and Hong Kong, said it’s working to clear up “confusion” over its inclusion on a US Pentagon list of companies with ties to the Chinese military.
The company was surprised to discover its name on the list and said that it had not been consulted ahead of time or asked for information. The firm plans to seek clarification and redress.
“We are not a Chinese military company, nor do we have any association with the Chinese military, and we do not belong on this watch list,” a spokeswoman said in an email. “We are an international investment firm with investments in China and other parts of the world. We have a robust governance and compliance programme in place to ensure we comply with all applicable laws in all jurisdictions in which we operate.”
However, there can be reputational consequences for being included, and other businesses and organizations may be reluctant to work with companies that are highlighted. “US companies might think twice about taking IDG money,” said H.K. Park, managing director at consultancy Crumpton Global, which is advising clients on scrutiny issues. And US investors “might think twice about investing in IDG’s funds.”
IDG appears to be the first investment firm to appear on the Pentagon’s list, Park said.
