MPs demand answers about attempted Imagination Technologies coup
MPs have summoned Imagination Technologies executives to answer questions about a move by its owner’s Chinese state-owned investor to seize control of the company.
Hertfordshire-based Imagination Technologies is globally-recognised for its semiconductor technology, which has been used by Intel, Apple, Samsung, and other major consumer electronics companies. It has 550 staff based in the UK.
It was acquired by Beijing-based private equity firm Canyon Bridge shortly after its biggest customer, Apple, announced it would stop using its graphics technology in 2017. Canyon Bridge is backed primarily by state-owned China Reform Holdings. The sale of Imagination Technologies was controversial, with then-Prime Minister Theresa May’s government approving the deal under the condition that Canyon Bridge would continue to invest in Imagination’s R&D in the UK and would be subject to US law. Canyon Bridge has since moved from the US to the Cayman Islands.
China Reform Holdings has recently been accused of attempting to wrestle over control of the group through the appointment of four board members sympathetic to its interests. According to Sky News, the former CEO of Imagination, Sir Hossein Yossaie, has warned the government that China Reform Holdings is trying to seize control of the company under the fog of the coronavirus crisis.
An emergency board meeting to approve the appointments was delayed last week after an intervention from the digital and culture secretary Oliver Dowden, who wrote to Imagination chairman Ray Bingham to request a meeting.
Last week, Ron Black stepped down as CEO of Imagination Technologies, followed soon after by chief product officer Steve Evans and chief technical officer John Rayfield. Evans is understood to have explicitly warned in his resignation letter that the Chinese government is attempting to seize control of the British technology company: “I will not be part of a company that is effectively controlled by the Chinese government,” he wrote.
MPs have summoned Imagination Technologies executives to answer questions about the behaviour of its owner’s investor, expressing concerns about national security issues and British jobs.
Conservative MP and chair of the foreign affairs select committee Tom Tugendhat commented: “The world has changed and companies – particularly tech companies – are on the frontline. Whoever writes the code, writes the rules for the world, more than any regulation passed by bureaucrats. There’s no point in taking back control from Brussels, only to hand it over to Beijing.”
Tugendhat suggested that the CCP may be trying to exploit confusion caused by the coronavirus pandemic to seize control of companies like Imagination Technologies: “We’re seeing quite a lot of action by the Chinese state, or state-owned companies, that seem to be exploiting this moment,” he said. “Companies like Imagination Technologies [have been] facing a rather hostile change in management in the last few weeks, which happened to coincide not just with the Covid crisis but also the Prime Minister being taken into hospital and the Easter weekend.”
Conservative MP and former Brexit Secretary David Davis told Reuters: “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 added that Imagination was a strategic asset for the UK and that the government should oppose the potential export of such a valuable company to China by almost any means possible: “[The government] should probably try to bring about a purchase of it by somebody else in a Western country. The government should be seeking every mechanism available to them to prevent this removal of our technology – full stop.”
Labour MP Stephen Kinnock took to Twitter to describe the matter as “an extremely concerning national security issue” and welcomed Tugendhat summoning Imagination Technologies to explain the transfer of control.
Ray Bingham, who has been named interim CEO of Imagination Technologies, commented: “Since acquiring Imagination Technologies in 2017, we’ve made great progress in transforming the company and we remain fully committed to the UK and to supporting our customers around the world.”
Imagination has said that it would welcome the chance to answer questions from MPs about concerns about its ownership and influences: “We welcome the opportunity to respond directly to any questions the committee may have and address any misunderstandings.”
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