China bans Manus merger deal, signals: transactions in key sectors must comply with regulations

Golden Finance reports that on April 30th, according to CCTV, industry lawyers stated that the Manus acquisition involved transferring domestic AI business assets abroad and ultimately selling them to the overseas company Meta. According to the “Measures for the Security Review of Foreign Investment,” even if the initial migration abroad occurred between related entities controlled by the founders, subsequent transactions would still fall under the scope of foreign investment security review. Additionally, Manus relocated its headquarters to Singapore, while its core business was still domestic at the time. Subsequently, the company gradually transferred key assets such as personnel and technology related to its core business abroad. Meanwhile, the Manus company within China was gradually separated from its core business, retaining only non-core operations. The entire operation ultimately resulted in the overall transfer of Manus group’s core business from China to overseas. Lawyers stated that any attempt to circumvent regulations through structural design is non-compliant; compliance is the lifeline of enterprises. Shen Ziying, senior partner at Beijing Jincheng Tongda Law Firm, said this sent a signal, indicating where the government’s regulatory red line is. National security review supervision follows the principle of “substance over form,” so I believe this has drawn a red line. (Dongxin News)