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Baidu Investor Challenges Search Giant’s Proposed Sale of Video Unit

July 19, 2016, 6:10 AM UTC
Security guards chat near a Baidu logo at the Baidu headquarters in Beijing on December 17, 2014. Baidu, China's leading search engine, and ride sharing company Uber announced a strategic investment and cooperation agreement on December 17. AFP PHOTO / Greg BAKER (Photo credit should read GREG BAKER/AFP/Getty Images)
Photograph by Greg Baker — AFP/Getty Images

Baidu’s (BIDU) proposed sale of online video unit iQiyi to its own chief executive is not in the interests of long-term shareholders and may permanently damage the reputation of the company, an investor in the Chinese Internet firm said.

In February, Baidu received an offer for its 80.5% stake in iQiyi from the chief executives of the two firms.

“We worry that embracing what is an inherent conflict of interest will lead to damage to the reputations of both you and Baidu,” Acacia Partners said in a July 18 letter to Baidu CEO Robin Li.


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The letter was distributed to media through public relations firm Finsbury, part of communications firm WPP.

“It is better for Baidu to be regarded as a key institution, not the extension of the pocketbook of one man,” the letter said.

A spokeswoman for the Chinese search giant declined to comment.