Taiwanese film studio snaps up Chinese surveillance camera specialist Dahua

Stymied by sanctions, it had to go … but where?

Chinese surveillance camera manufacturer Zhejiang Dahua Technology, which has found itself on the USA’s entity list of banned orgs, has fully sold off its stateside subsidiary for $15 million to Taiwan's Central Motion Picture Corporation, according to the firm's annual report released on Monday.

Dahua earned its place on the naughty list in October 2019 for its role in mass surveillance of Uyghurs – China's ethnic minority population centered in Xinjiang.

The resulting ban meant it could not sell stateside, leaving its US operations orphaned. Since then, the US has further cracked down on Dahua – in March 2021 the Federal Communications Commission (FCC) issued an "Interim Freeze Order" that bans new equipment authorizations for a year, and in October 2022 the camera-maker was added to a group of "Chinese military companies."

Hikvision, the leading China-based surveillance camera maker that has been on the entity list since 2019, challenged [PDF] the FCC in US appeals court and lost earlier this month.

By then, the agreement to sell Dahua's US operations was already inked. Monday's annual report lists the date of the share purchase agreement as January 3, 2024.

Dealers and distributors of Dahua products were reportedly first informed the buyer was a "reputable Taiwan-based manufacturer." The signatures of the emails included the names Luminys System Corp. – a small company in California that resells and rents lighting equipment – and Foxlink – a larger Taiwan-based manufacturer with connections to former Foxconn president Terry Gou.

Luminys refers to itself as a "subsidiary of CMPC" on its LinkedIn profile. Foxlink's website states that in 2015, it became a 13.6 percent shareholder of Central Motion Picture Corporation.

Despite the convoluted January messaging to dealers and distributors – which some have called out as intentional – Dahua made clear in its annual report [PDF} that the last remaining Dahua unit in the United States has been sold. The surveillance specialist even threw in $1 million worth of inventory.

The once state-owned, now privatized, Central Motion Picture Corporation is one of the most prominent film and distribution companies in Taiwan, and has made Chinese-language films since the 1950s.

The Reg has asked CMPC and Foxlink for information about their structure and how they plans to incorporate Dahua. Expect an update if a significant reply materializes.®

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