Washington: A US Congressional panel has announced a bipartisan scrutiny into top investment firm Sequoia Capital’s investments in China.
The Select Committee on the Chinese Communist Party (CCP), led by Mike Gallagher (R-WI) which also has Indian-American Congressman Raja Krishnamoorthi as a ranking member, has sent a letter to Sequoia Capital following its announcement to split from Sequoia Capital China.
“Splitting off its China business … is a step in the right direction. However… Sequoia Capital China’s significant US dollar investments in People’s Republic of China (PRC) entities have included certain investments that contributed to the CCP’s human rights abuses, the PRC’s military modernisation, and its overall efforts to undermine U.S. technological leadership,” the letter read.
The letter, addressed to Sequoia Capital Managing Partner Roelof Botha and Don Vieira, Global Chief Policy Officer at Sequoia Capital, said that it writes to request information about Sequoia’s investments in artificial intelligence (AI), quantum computing, and semiconductor companies in the People’s Republic of China (PRC), “and to better understand Sequoia Capital’s announcement that it would split from Sequoia Capital China by March 2024”.
By splitting off its China business, “it appears likely that Sequoia will reduce the flow of American technological and managerial expertise from US-based venture capital funds (VCs) to such PRC-based companies, which is a step in the right direction”.
“However, additional questions remain regarding how the split may affect flows of US capital and flows of technological know-how from US companies to foreign venture funds,” the letter further said.
Sequoia announced in June that it would be splitting into three pieces: Sequoia Capital in the US and Europe, Peak XV Partners in India and Southeast Asia, and HongShan in China (formerly Sequoia Capital China).
The letter from the committee asked Sequoia to list all companies it has invested in that are based or have significant operations in China, along with details like ownership, Chinese government interest, decision-making processes and so on.
It also asks for more information on the reported 50 per cent of Sequoia Capital China partners who are based in the US and how they have invested. “Lastly, it asks how Sequoia would respond if the US put one of Sequoia’s portfolio companies on a sanctions or trade restriction list,” reports TechCrunch.
Sequoia Capital China had already significantly scaled back its capital deployment in the country before it split from its US mothership, the report mentioned.
–IANS