Tencent and CATL denied military ties alleged by the US

The U.S. Defense Department said on Monday it has added Chinese tech giants including gaming and social media leader Tencent Holdings (0700) and battery maker CATL to a list of firms it says work with China's military.

Tencent said in a statement that its inclusion on the list was "clearly a mistake." It added: "We are not a military company or supplier. Unlike sanctions or export controls, this listing has no impact on our business."

CATL, the world's largest electric vehicle battery maker whose Shenzhen-listed shares dropped more than 5 percent, also called the designation a mistake, saying it "is not engaged in any military related activities."

Artificial intelligence leader SenseTime (0020), which also was added to the list, said the firm strongly objects it, and will actively communicate with all parties on this matter as soon as possible to ensure fair treatment and to maximize the protection of our company and shareholders' interests.

The annually updated list of Chinese military companies, formally mandated under U.S. law as the "Section 1260H list," designated 134 companies, according to a notice posted to the Federal Register.

The Hong Kong-listed shares of Tencent fell as much as 7 percent in early trade, while the U.S.-traded shares of the company, which is also the parent of Chinese instant messaging app WeChat, fell 8 percent in over-the-counter trading.

The list also included chip maker Changxin Memory Technologies, Quectel Wireless and drone maker Autel Robotics, according to a document published on Monday.

A Quectel spokesperson said the company "does not work with the military in any country and will ask the Pentagon to reconsider its designation, which clearly has been made in error." Quectel's shares fell nearly 7 percent.

(Reuters and Themis Qi)