In late April, Florida Rep. Michael Waltz (R) directed a letter to Secretary of the Treasury Janet Yellen. In the letter, Waltz questions whether the Committee on Foreign Investment in the United States (CFIUS) has reviewed the acquisition of Forbes Global Media Holdings (Forbes) by a China-based special purchase (SPAC).
The company in question, Magnus Opus Ltd (Magnus Opus), met with representatives of Forbes in late March. Further probing the issue, Waltz has directed another letter to U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler on the matter, sharing his “grave concerns” over the possible ownership.
Waltz writes that “in recent years, there has been clear market manipulation of U.S. companies and entities with economic ties to the Chinese Communist Party (CCP),” and he goes on to warn that “this includes CCP’s censorship of Disney-owned programs that do not align with the CCP’s ideology and financially punishing the National Basketball Association when players or personnel speak out in protest of ongoing CCP atrocities.”
Referencing the meeting that took place on March 27, 2021, between representatives of Magnum Opus and Forbes, Waltz warns of the “disturbing control the CCP could have over Forbes and risk to investors should the SEC approve the screening” of Magnum Opus acquiring Forbes.
According to disclosures found in an April 2022 SEC filing, “PRC governmental authorities may seek to intervene or influence such companies’ operations at any time that the government deems appropriate to further its regulatory, political and societal goals.”
In turn, following up on the letter directed to Secretary Yellen, Waltz poses a number of questions for Chairman Gensler.
- What is the status of SEC’s proxy screening of Magnum Opus’ acquisition of Forbes?
- Is the SEC aware of the initial investments made by the CIC to Magnum Opus just two days before Magnum Opus met with representatives of Forbes?
- Has the SEC reviewed the ties of the Magnum Opus “PIPE” investors to the CCP or PRC?
- Does the SEC have concerns with investors having potential ties to the CCP or PRC?
- Has the SEC reviewed other CCP or PRC-backed private equity or special purpose acquisition companies?
- Is the SEC aware of the payment to Forbes CEO Michael Federle and would the SEC characterize such a large payment upon the completion of a business combination agreement and prior to the approval of an acquisition as unusual, concerning or ethical?