Security Concerns Prompt British MPs To Summon Chinese Owned Firm

British Members of Parliament (MPs) summoned a leading UK-based company to seek answers over security issues surrounding the activities of the company.

Concerns in the UK have recently emerged over the renewed efforts by the Chinese owner of Imagination Technologies to transfer ownership of sensitive security software to companies controlled by China. According to the lawmakers, attention from such controversial technology transfers is being diverted because of the ongoing coronavirus crisis.

Critics fear that such transfer of sensitive security software could compromise the networks in the United Kingdom, Europe and the United States.

The technology developed by the Hertfordshire, UK–based Imagination Technologies could be put to use to fine tune the design of the so-called “backdoors” into strategically important digital infrastructure, said Tom Tugendhat, the chair of the Foreign Affairs Select Committee, in an interview to the BBC.

“The world has changed and companies – particularly tech companies – are on the frontline,” said Tugendhat. “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.”

US-based but Chinese state-owned investment firm called Canyon Bridge had acquired Imagination Technologies in September 2017. Canyon Bridge is in turn owned by a Chinese state-owned investment fund called China Reform.

The acquisition was approved by Theresa May’s government on the basis that the acquiring company was licensed and regulated under US law, Tugendhat said. But since the acquisition, Canyon Bridge had moved its headquarters to the Cayman Islands and and therefore the company was no longer bound by laws of the US.

Concerns about the future direction and ownership of the company have also prompted a number of senior executives of the company, including chief executive Ron Black, to resign from their positions recently.

Chief product officer Steve Evans and chief technical officer John Rayfield also resigned recently.

“I will not be part of a company that is effectively controlled by the Chinese government,” Evans is understood to have said in his resignation letter.

While it was possible to avert an attempted boardroom coup ten days ago by the China Reform through appointment of four of its own directors, there have been recent and renewed concerns about the company again trying to transfer sensitive technology patents to mainland China which has resulted in the call for evidence by the MPs.

Software that is able to detect whether any weaknesses in sensitive digital networks – so-called “backdoors” are the result of error or intention, is produced by Imagination, in addition to designing of graphics and virtual reality software for computer chips, said industry experts.

The latest move by the British MPs comes just a day after the Margrethe Vestager, the chief of the European Union Competition agency, warned that vulnerability of companies across Europe being taken over by Chinese companies is increasing because many of the companies have been or are being pushed to the brink of bankruptcy because of the economic impact of the coronavirus pandemic ravaging through Europe. .

(Adapted from BBC.com)

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