Lenovo on Friday denied accusations of its ties with the Chinese government and that its PCs could be used for espionage. The comment follows a letter that members of the House Select Committee sent to the chief executive of Navy Exchange, a retail store for U.S. service members and veterans. The committee requested that Naval Exchange stop selling Lenovo PCs, citing the company's ties with the Chinese government and past cybersecurity incidents. The letter was signed by Mike Gallagher (R), a congressman from Wisconsin.
"The assertions regarding Lenovo cited in Chairman Gallagher's letter are based on past claims that were inaccurate, unsubstantiated or resolved years ago," a statement by Lenovo reads.
No Ties with Government, No Control from Legend Holdings
The House Select Committee accused Lenovo of notable associations with the Chinese government.
"The exchange should not be selling Lenovo products to U.S. service members, let alone incentivizing such purchases with tax-free, discounted prices," the letter reads, reports Military Times.
The letter asserted that Lenovo is not only closely linked with influential bodies like the People's Liberation Army and the Chinese Academy of Sciences, but its primary shareholder, Legend Holdings, is also intertwined with the Chinese Academy of Sciences. This network of associations brings forward potential espionage risks.
"Lenovo is not affiliated with the People's Liberation Army in any way, is not invested in or controlled by the Chinese government or the Chinese Communist Party, and does not participate in or have links to Chinese state-run cyberespionage campaigns," the company's spokesperson said.
While Legend Holdings is a shareholder of Lenovo that owns a 36% stake, it only controls two out of 12 board seats and has no control over the company. Furthermore, Lenovo is a publicly traded company that adheres to global corporate governance requirements.
"Lenovo operates independently, with no disproportionate Legend representation," a recent report by Fitch Ratings reads. "There are no related-party transactions, management overlap or operational integration. External monitoring and corporate governance requirements prohibit any Legend interference. Legend has some influence but no control over Lenovo."
Spyware?
Lenovo has been implicated in situations where it was said to have embedded VisualDiscovery 'shopping assistant' program developed by Superfish, which was later considered spyware and probable BIOS backdoors on its devices, the congressman asserts.
"[Lenovo's] links to state-run cyberespionage campaigns are well documented, and it is believed to have been complicit in installing Superfish spyware and potentially a BIOS backdoor on a number of its computer products," the letter reads. "We are concerned that [Chinese] actors could gain access to service members' sensitive personal information and exploit this access to compromise U.S. national security."
Meanwhile, Lenovo was not the only company to install such programs on its PCs.
Global Company
Although based in Beijing, China, Lenovo has 6,000 employees in the U.S. and thousands worldwide. After buying IBM's PC business in 2005, the company passed numerous U.S. security reviews by CFIUS and met all audit standards. Furthermore, the company has supplied PCs and other devices to various U.S. government agencies, so it believes it had passed various security checks.
"Lenovo is a global company dual-headquartered in Beijing and Morrisville, NC, and employs approximately 6,000 people in the United States," the statement by Lenovo claims. "Since 2005, when it purchased IBM's PC division, Lenovo has successfully completed five national security reviews by the U.S. Committee on Foreign Investment in the United States (CFIUS) and has fully complied with post-review audits and oversight requirements. We have been a trusted vendor to multiple U.S. government agencies over many years, and our products deliver excellent value, performance and reliability."
