Imagination Technologies to be grilled over China security issues

(Image credit: ericsson)

Executives from UK-based Imagination Technologies have been summoned by MPs to face questioning over concerns the firm could become a puppet of the Chinese government.

The company was acquired by China-owned Canyon Bridge in 2017, which was then based in the US, but is now headquartered in the Cayman Islands - a notorious tax haven.

MPs are concerned technology produced by Imagination Technologies - which is designed to identify network vulnerabilities - could be used to create backdoors into critical digital infrastructure, compromising the security of UK networks.

The call for evidence was also prompted by fears the Chinese owners intend to relocate the company’s technology patents to China.

China security concerns

The acquisition of Imagination Technologies by Canyon Bridge was originally approved on the grounds the investment firm operated under US legal jurisdiction. However, the relocation to the Cayman Islands means this is no longer the case, leading to concerns the influence of the Chinese state could expand within Imagination Technologies unchecked.

The company has also seen its board decimated, with several high-profile executives heading for the exit over concerns about the association with China.

Departures include CEO Ron Black, CTO John Rayfield and Chief Product Officer Steve Evans, who stated in his resignation letter: “I will not be part of a company that is effectively controlled by the Chinese government.”

The summons follows a warning from Margrethe Vestager, EU Commissioner for Competition, that European businesses - many of which are struggling to weather a period of turbulence brought about by the coronavirus pandemic - are vulnerable to foreign takeover bids.

The EU is set to release proposals in June for legislation that will eliminate advantages held by corporations owned or backed by non-EU states. The measure will also act as a deterrent to foreign powers hoping to seize control of companies whose share price has plummeted in recent weeks as a result of the pandemic.

Vestager also suggested European governments should consider buying stakes in struggling business, to stave off the threat of foreign acquisition.

“We don’t have any issues of (sic) states acting as market participants if need be - if they provide shares in a company, if they want to prevent a takeover of this kind,” she said.


Joel Khalili
News and Features Editor

Joel Khalili is the News and Features Editor at TechRadar Pro, covering cybersecurity, data privacy, cloud, AI, blockchain, internet infrastructure, 5G, data storage and computing. He's responsible for curating our news content, as well as commissioning and producing features on the technologies that are transforming the way the world does business.