Lenovo then and now, ripped from internal documentation
Lenovo might not be all you think it is

I am not usually one to chime in about political matters, but I have been following the Lenovo-US Government debate for some time.  Last week we published an article with regard to the percentages of state shareholders in the company.  As of June 2006, the exact shareholder percentages (according to Lenovo internal documentation) are as follows:

  • Public shareholders 34.7%
  • Legend Holdings Limited 42.0%
  • IBM 13.2%
  • Texas Pacific Group, General Atlantic LLC and Newbridge Capital LLC 10.1%

Legend Holdings, as many of us know, is the parent company for Lenovo.  65% of Legend Holdings is owned by The Chinese Academy of Sciences and the other 35% is owned by the  Employee Shareholding Society of Legend Holdings.  Make no mistake, Legend Holdings is a state owned enterprise (SOE).  For all intents and purposes, the Chinese Academy of Sciences -- a Chinese governmental office -- indirectly controls 27.3% of Lenovo through Legend Holdings. 

That's not to say the Chinese government only controls 27.3% of Lenovo.  34.7% of Lenovo and 35% of Legend Holdings are held by private investors and employees -- some of which are government officials. 

Regardless, should the rest of the world be intimated by Lenovo?  Considering the company had revenue in 2005 of $13.3B USD with a net profit of $309M USD, I'd say so.  Am I worried about my Lenovo laptop containing an electronic surveillance device that emails my passwords to the Chinese government?  Lenovo did more than $3B USD worth of business with the US last year, and it would only take one incident of a bugged Lenovo product to virtually wipe that number to zero overnight.  Quite frankly, I think the Politburo is more interested in driving BMWs than reading my email.

"Nowadays you can buy a CPU cheaper than the CPU fan." -- Unnamed AMD executive
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