A state-owned Chinese investor is exploiting the coronavirus crisis to seize control of Imagination Technologies, the British chipmaker’s former boss has warned.
Sir Hossein Yossaie, who served as chief executive until 2016, has written to ministers urging them to block China Reform Holdings from taking control of the company’s board, Sky News reported.
Yossaie also said the Department for Digital, Culture, Media and Sport (DCMS) should step in to reinstate Ron Black, who stepped down as chief executive last week.
It marks the latest salvo in an escalating row about Imagination’s future amid concerns over China Reform Holdings’ links to Beijing.
The Chinese investor, which is a major shareholder in Imagination’s private equity owner Canyon Bridge, has moved to nominate four directors to the chipmaker’s board.
Yossaie told ministers he believed “the Chinese actions are heavily or even totally political and even suggest they thought they can use Covid cover and do their deeds whilst our government is dealing with that crisis”.
“This suggests their long-term intentions are not good and very self-centred,” he added.
The row has triggered a boardroom exodus at Imagination, with chief product officer Steve Evans and chief technical officer John Rayfield both stepping down last week over the attempted coup.
In his resignation, seen by Sky News, Evans wrote: “I will not be part of a company that is effectively controlled by the Chinese government.”
An emergency board meeting called to vote on the China Reform Holdings nominations was called off last week after senior MPs raised concerns about the move.
However, the boardroom plot still faces investigations on both sides of the Atlantic.
Former cabinet secretary David Davis today said the government should use all means at its disposal to prevent British technology from being transferred to China, including seeking a western buyer for the company.
“What we think is going on is the Chinese are trying to export the technology base from here to China and that’s inappropriate,” he told Reuters.
The Foreign Affairs Committee today asked top executives from Imagination to give evidence as part of an inquiry into foreign asset stripping of UK companies, while officials from DCMS, the Cabinet Office and the National Cyber Security Centre have been called in to examine the situation.
US President Donald Trump’s administration is also said to have opened an investigation into China Reform Holdings’ actions.
In a statement issued last week Imagination Technologies said it was committed to increasing its investment in the UK. However, it did not comment on whether the firm would remain headquartered in Britain.
Imagination has a major licensing deal with Apple and supplies chips for billions of smartphones worldwide.
MPs have warned the transfer of sensitive technology to Chinese-controlled companies could pose national security concerns.
“Whoever writes the code, writes the rules for the world, more than any regulation passed by bureaucrats,” Tom Tugendhat, chair of the foreign affairs committee, told the BBC today.
“There’s no point in taking back control from Brussels, only to hand it over to Beijing.”