Business Secretary Kwasi Kwarteng has ordered the next stage of a review of a proposed Chinese takeover of a group of British tech companies, citing national security concerns.
This measure would allow the Secretary of State to block the proposed sale if it is found to threaten British interests.
Last September, the plan to sell Perpetuus Group to a group led by the Chinese Shanghai Kington Technologies was blocked by Mr. Kwarteng.
Perpetuus Group is a collection of British companies, some of which have developed new intellectual property involving graphene, a modern engineering super material. These technologies have “strategic applications,” according to a statement issued Wednesday by the Department for Business, Energy and Industrial Strategy.
Mr Kwarteng said of the next steps in the investigation: “The UK remains firmly open for business, but we have made it clear that foreign investment must not threaten our national security.
“I have reviewed the evidence presented to me and have asked the Competition and Markets Authority to undertake a thorough investigation so that we can fully consider the implications of this transaction,” added the business secretary.
The inquiry is using powers under the Companies Act 2002 because the government intervened before its new legislation, the National Security and Investment Act, came into force this year.
Perpetuus’ website describes a range of applications for its nanomaterials, which are constructed from tiny particles that can help reduce the scale of electronic circuits or improve their performance.
Graphene, one of these materials, is a key branch of Perpetuus’ specialties in sensitive technologies. It is used to create coatings and components that are much stronger or more aerodynamic than those using other comparable materials. Its applications are multiple in innovative engineering, from vehicles to aircraft.
The transaction is seen as far more sensitive than the proposed takeover of semiconductor maker Newport Wafer Fab, according to senior government sources. Indeed, Perpetuus technologies involve more sensitive and novel intellectual property.
The £63million sale of Newport Wafer Fab last year to Nexperia, a Dutch company owned by China’s Wingtech, is also under consideration. This was confirmed in a statement by Business Secretary Lord Callanan on April 7, but it came after a protracted debate among senior government officials over the deal.
There are deep divisions within the cabinet over the role of Chinese investments in the UK and the threats they may pose to national security. Foreign Secretary Liz Truss and Mr Kwarteng are said to be keen to reduce reliance on China within sensitive supply chains.
Other figures, including Prime Minister Boris Johnson and Chancellor Rishi Sunak, have expressed concern that national security fears should not outweigh the need to remain an attractive investment destination for the world’s second largest economy.
Perpetuus and Newport Wafer Fab, the former whose activities include the creation of conductive coatings for electronics and the latter which manufactures silicon wafers, are two case studies that will inform the government’s semiconductor strategy. This is due to be published this month by the Department for Culture, Media and Sport, according to sources in Whitehall.
The review of the potential sale of Perpetuus is expected to last 24 weeks, but this could be extended if officials believe more time is needed for their investigations.
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Source: www.independent.co.uk
This notice was published: 2022-05-11 17:58:18
