“We’re seeing quite a lot of action by the Chinese state, or state-owned companies, that seem to be exploiting this moment,” Tom Tugendhat, the chair of the Foreign Affairs Select Committee, told Sky.
“Companies like Imagination Technologies… it’s 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.”
British lawmaker David Davis also said on Tuesday the British government should seek every mechanism to prevent the removal of the technology base of Imagination Technologies to China, including seeking a Western buyer for the company.
Imagination Technologies licenses its semiconductor chip designs that are the basic units powering everything from smartphones to computer game consoles. They are also used in artificial intelligence and data transfer.
The company, which like larger rival ARM Holdings was a jewel in Britain’s technological crown, was bought by private equity firm Canyon Bridge in 2017.
Canyon Bridge is in turn backed by Chinese state-owned China Reform holdings, which had tried to wrest control of the group by seeking to appoint board members who will support them.
A board meeting due to take place last Tuesday was delayed after the British government intervened, the government said.
Ron Black stepped down as chief executive on Friday, the company said.
“What we think is going on is the Chinese are trying to export the technology base from here to China and that’s inappropriate,” Davis, a lawmaker from Prime Minister Boris Johnson’s Conservative Party, told Reuters.
An Imagination Technologies spokesman declined to comment.
Davis said Imagination, a supplier of semiconductor intellectual property to groups like Apple, was a strategic asset and that the government should make it absolutely plain that it does not view the export of such important British technology with equanimity.
“It should probably try to bring about a purchase of it by somebody else in a Western country,” Davis said. “The government should be seeking every mechanism available to them to prevent this removal of our technology – full stop.”
The sale of Imagination Technologies, founded in 1985, was approved by the government of then-Prime Minister Theresa May on the basis that Canyon Bridge would be subject to US law.
Canyon Bridge was originally incorporated in the United States but has since moved to the Cayman Islands, a spokesman said.
The sale of Imagination in 2017 came after its biggest customer Apple said it would stop using its graphics technology.
Just before the £550 million deal was agreed, Canyon Bridge was blocked from buying chipmaker Lattice Semiconductor Corp for US$1.3 billion by US President Donald Trump, amid concerns the deal posed a threat to national security.
The move foreshadowed the battle between the Trump administration and Chinese telecoms equipment maker Huawei Technologies, which escalated in 2018.
British government officials met Canyon Bridge during the 2017 takeover talks, and it pledged to invest in Imagination’s research and development capabilities in Britain when the deal was approved in November of that year.
Imagination’s former chief executive, Hossein Yossaie, has warned the government that China Reform was trying to seize control of the company using the coronavirus crisis as cover, Sky News said on Tuesday.
Yossaie could not immediately be contacted for comment.
Imagination, which has 550 staff in the United Kingdom, said on April 10 chief executive Black would be replaced by Ray Bingham, executive chairman and partner at Canyon Bridge.
“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,” Bingham said in an April 10 statement.