BlueFocus caught up in ‘probe box’ controversy

Chinese communications company BlueFocus has had to deny knowledge of the day-to-day operations of a company in which it is an investor, following an investigative exposé aired during CCTV’s annual programme dedicated to consumer rights.

A report aired during the so-called 3.15 gala showed how technology firms, including Behe Technology, were using a machine referred to as a probe box to harvest data from consumers’ smartphones, without their knowledge, in public places such as shopping malls.

BlueFocus is a listed shareholder of Behe Technology, as are speech- and language-technology company iFlytek and others.

A few hours after the show, BlueFocus and iFlytek issued similar statements, both saying they invested in Behe Technology a few years ago, have no seat on its board and are not involved in its daily operations. IFlytek also said that it only holds a 3.7% stake in the company.

On Saturday, the Shenzhen Stock Exchange sent a letter to BlueFocus, asking it to explain its stake in Behe Technology as well as whether it was involved in illegally collecting personal information.

BlueFocus said in a statement posted on the Shenzhen bourse late on Sunday that it was not involved in the activity. Further, it said it had bought a 25% stake in Behe Technology in December 2014 when the latter’s main business was internet advertising based on real-time bidding. However, by the first half of 2016, BlueFocus has reduced its stake to 19.79% and had no representatives on the board.

According to the CCTV report, a 'probe box' detects mobile devices when they reach out to detect nearby wireless networks. The machine can decipher the smartphone’s IMEI (international mobile equipment identity) number, which can then be referenced with other data sources to determine the user’s phone number and other data.

In the CCTV show, a manager of Behe Technology, surnamed Tan, whose face was blurred, told how the company matches the phone number with data collected when users register for various apps to produce consumer persona profiles.

Behe Technology also issued a statement, saying that a company in which it is an investor, Tianjin Behe, makes the probe box shown by CCTV. Behe said it takes no part in the operation or management of Tianjin Behe.

BlueFocus shares appeared unaffected, rising on both Monday and Tuesday.

Other firms discussed in the 3.15 programme include Shenzhen-based probe box manufacturer Soundtooth, Samoyed Financial Service, Shenzhen ZK-Link Technology and Shanghai Zhizi Information Technology.