Press Releases

WASHINGTON, D.C. — On Friday, U.S. Representative Mike Waltz (FL-6), sent a letter to U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler pressing for information regarding the SEC’s proxy screening of the Forbes Global Media Holdings (Forbes) acquisition by a Chinese special purpose acquisition company (SPAC), Magnum Opus Acquisition Limited (Magnum Opus).

The inquiry follows Rep. Waltz’s letter to Secretary of Treasury and Chair of the Committee on Foreign Investment in the United States (CFIUS), Janet Yellen, on April 26, 2022, asking if the acquisition was under review by CFIUS. 

Last August, Forbes and Magnum Opus entered into a definitive business combination agreement that would allow the SPAC to acquire the media company. However, disclosures made by Magnum Opus to the SEC raise a number of national security concerns including affiliation with the Chinese Communist Party (CCP).

On March 25, 2022 Magnum Opus received financial backing from the Chinese Investment Corporation (CIC), a financial arm of the CCP. CIC Chairman Peng Chun personally signed the paperwork for CIC’s investment of Magnum Opus. Two days after receiving CIC’s investment, Magnum Opus met with representatives of Forbes.

Additionally, disclosures made in an April 2022 SEC filing show disturbing control the CCP could have over Forbes and risk to investors should the SEC approve the screening:

“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.”

You can read the full letter and other national security concerns over the acquisition below:

Dear Chairman Gensler:

I write concerning the ongoing Securities and Exchange Commission (SEC) review, or proxy screening of the August 2021 business combination agreement made by the Chinese special purpose acquisition company (SPAC) Magnum Opus Acquisition Limited (Magnum Opus) and Forbes Global Media Holdings (Forbes). Upon review of Magnum Opus’s SEC filings, I have serious concerns regarding the disclosures made in the filings and the national security implications of approving such an acquisition.

In recent years, there has been clear market manipulation of U.S. companies and entities with economic ties to the Chinese Communist Party (CCP). 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. I fear the CCP has begun taking actions to influence U.S. media companies that serve as a key pillar to our constitutionally guaranteed freedom of speech. 

According to an April 2022 SEC filing, representatives of Magnum Opus first met with representatives of Forbes on March 27, 2021. However, two days prior to their meeting on March 25^, 2021, Magnum Opus secured its first major seed funding from the Chinese Investment Corporation (CIC), a sovereign wealth fund and arm of the CCP. In fact, Chairman of CIC Peng Chun personally signed the paperwork for CIC’s investment of Magnum Opus. 

CIC has now reportedly divested its shares from Magnum Opus but its original investment raises serious concerns that are backed by disclosures made by Magnum Opus to its investors in last month’s filing:

“PRC [People’s Republic of China] governmental authorities have significant oversight and control over the ability of companies based in mainland China or Hong Kong to offer securities to, and accept investment from, foreign investors and may exert more control over offerings conducted overseas by, and foreign investment in, companies based in mainland China or Hong Kong; (ii) 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.”

This filing also notes the risk posed to what Magnum Opus describes as its Private Investment in Public Equity (PIPE) Investors[1], many of whom are based in China and reportedly hold 49% of shares in the company.

According to the April SEC Proxy Statement, Magnum Opus disclosed “$4.0 million to be paid to Michael Federle, Forbes’ Chief Executive Officer and any members of Forbes’ management that he may designate, in connection with the Business Combination as a transaction bonus, of which $2.0 million will be paid through the transfer of 200,000 Founder Shares from the Sponsor.” This unusual payment occurred upon the completion of a business combination agreement and prior to the approval of an acquisition.

Given these disclosures, I have grave concerns regarding the beneficial ownership of a major U.S. media company by the CCP and their ability to interfere in business operations of Forbes should this acquisition be approved. For years Forbes has been a beacon of reporting on capitalism, democracy, and international affairs in the free press. I fear that if a precedent is set to allow Chinese companies to acquire U.S. media entities, it will provide the CCP platforms to spread propaganda through U.S. media.

• 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?

Thank you for your attention to this important issue and I look forward to your response to the above questions.