Trump administration orders reversal of StayNTouch acquisition

The White House ordered the Chinese company immediately to refrain from accessing any of StayNTouch’s hotel-guest data. Photo credit: Shiji Group

The White House ordered the Chinese acquisition of a hotel property-management software company reversed on national security grounds. President Donald Trump ordered Beijing Shiji Information Technology Co. to unwind its 2018 acquisition of StayNTouch, the White House said in a statement.

In Friday’s order, Trump said there was “credible evidence” that the Chinese company “might take action that threatens to impair the national security of the United States.”

The document ordered the Chinese company immediately to refrain from accessing any of StayNTouch’s hotel-guest data. “The purchaser shall ensure that controls are in place to prevent any such data access until such time as the divestment has been completed and verified,” the order says.

Beijing Shiji is part of the Shiji Group, which sells software for the hotel, foodservice, retail and entertainment industries. The company said the software is used in connection with 90,000 hotel rooms globally.

In a statement, Shiji said that it was disappointed in the decision and that the American government had not adequately explained its rationale. “Though we believe the decision was incorrect—Shiji does not pose a threat to U.S national security in any way—we are in the process of consulting with the appropriate U.S. authorities and advisors to comply with the order.”

The Committee on Foreign Investment in the United States conducted a routine review of Shiji’s investment into StayNTouch. Over the course of seven months, Shiji cooperated with the committee and worked diligently to provide all the documents and information requested by the U.S. government, the company said. “We offered a range of significant proposals to mitigate any concerns the U.S. government might have, including further restricting access to guest data and appointing an independent monitor to ensure these protections. For reasons unknown to us, these proposals were not accepted.”  

“That being said, we fully respect the order and are currently in the process of working out the most constructive way to divest from StayNTouch in accordance with the law and instructions of the U.S. government. In addition to respecting the law, our priority is to ensure this does not in any way disrupt our customer’s business, their operations, or the service they receive by the staff of StayNTouch.”