Following Apple’s recommendation that shareholders vote against a proposed “China Entanglement Audit,” the National Legal and Policy Center (NLPC) has submitted a new filing with the SEC, urging investors to back the measure. Here are the details.
Apple’s China strategy draws renewed scrutiny from activist investor group
Apple’s decades-long reliance on China has long been the subject of scrutiny, especially over geopolitical and supply-chain risks.
That scrutiny became even more apparent over the past year amid President Trump’s tariff war, and the company’s efforts to quickly shift parts of its manufacturing to countries like India and Vietnam.
In light of that, the NLPC has been pushing for a so-called “China Entanglement Audit,” which would require Apple to formally assess and report on the risks and costs tied to its dependence on China.
In response, Apple recently recommended that shareholders vote against the proposal, arguing that “the requested report is unnecessary given we already provide extensive information on our international operations,” and that “the proposal is highly prescriptive and attempts to inappropriately restrict Apple’s ability to manage its own ordinary business operations and business strategies”.
Now, the NLPC has filed a new proxy memo with the SEC, doubling down on its pro-audit recommendation. In the document, they argue that Apple has not provided investors with a clear, quantified picture of its China-related risks.
From the document:
“For over a decade, Apple has constructed a business model that links to the People’s Republic of China (PRC). This entanglement is no longer merely an operational choice; It has become an existential vulnerability. While the Company’s Board of Directors argues in its opposition statement that current disclosures are “extensive,” these disclosures fail to provide the quantified, scenario-based financial analysis required for shareholders to assess the resilience of their investment in an increasingly volatile geopolitical climate.”
This isn’t the first time Apple’s reliance on China has put it at odds with the NLPC. In 2023, the group supported a “Communist China Audit” focused on Apple’s exposure to geopolitical, supply-chain, and human-rights risks linked to China.
Back to the “China Entanglement Audit”, the decision now sits with shareholders, who will vote on the new proposal (along with other proxy items) at Apple’s virtual annual meeting on February 24, 2026.
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