A British microchip company has been in the spotlight this month after a China-backed investor tried to seize control of its board.
The chip designer, Imagination Technologies, was bought by Canyon Bridge in 2017. Canyon Bridge’s main investor is Chinese state-owned company China Reform Holdings.
Earlier this month, news surfaced that Canyon Bridge tried to appoint four new directors from China Reform Holdings to Imagination’s board, effectively taking control of the company.
It sparked resignations from top executives at the firm.
According to Sky News, one of them, the chief product officer, wrote in his resignation letter, “China Reform have clearly set out to take control of the business for reasons best known to themselves, and I will not be part of a company that is effectively controlled by the Chinese government.”
The takeover plans were cancelled after the UK government intervened. Since then two top executives agreed to come back.
The only senior resignation now is from CEO Ron Black, and the search has begun for his replacement who will reportedly be independent of Canyon Bridge, according to an Imagination spokesperson.
An inquiry launched by politicians in the UK Foreign Affairs Committee is investigating those involved in such strategic takeovers. Some fear that the virus crisis means these transactions could happen under the radar.
“We want to see the government sit up and pay attention, especially when these takeovers could be seen as a potential threat to national security or an attempt by a hostile party to gain leverage in key sectors of our economy,” said committee chair Tom Tugendhat in a statement.
There are signs of a growing reluctance to allow Chinese investment in UK businesses, partly because of the Chinese regime’s handling of the CCP virus pandemic.
Recently, the former chief of Britain’s MI6 foreign intelligence service said the West needs to do more to be independent of China, and supported efforts to stop China from buying up Imagination Technologies.
Reports say the U.S. administration is also investigating the attempted UK takeover. Canyon Bridge similarly tried to take over American chipmaker Lattice in 2017, but it was blocked by the Trump administration.
“All investment out of China is strategic when it comes to technology,” Robert Spalding, former senior official of the White House National Security Council, told NTD. “They have been monitoring outflows of exchange to ensure that it’s only going for things that the Chinese Communist Party approves of.”
Witnesses are expected to give evidence at an online UK parliamentary session next month.