Satellite tv for pc large suitor paid £150m to China: Calls from influential MPs to probe sale of taxpayer-backed OneWeb over hyperlinks to Beijing
- Eutelsat stated it had agreed a deal to merge with OneWeb
- However the Chinese language connection has triggered safety considerations over the plan
- Funds made to CIC, certainly one of Eutelsat’s largest shareholders
- Britain’s stance on Chinese language funding has hardened in Tory management election
The French communications group making a swoop on British satellite tv for pc large OneWeb has handed greater than £150 million to the Chinese language state prior to now decade.
Eutelsat stated final week it had agreed a deal to merge with OneWeb, which is backed by the taxpayer. However the Chinese language connection has triggered safety considerations over the plan – which is able to imply Britain sits alongside China as an investor within the enlarged group.
The Mail on Sunday can reveal the funds have been made in dividends to the China Funding Company (CIC), certainly one of Eutelsat’s largest shareholders because it purchased a seven per cent stake 10 years in the past. Britain’s stance on Chinese language funding has hardened throughout the Tory management election.
Questions: Eutelsat stated it had agreed a deal to merge with OneWeb, which is backed by the taxpayer
Rishi Sunak stated final week the superpower posed the ‘greatest long-term menace to Britain’, whereas Liz Truss pledged to counter China’s dominance by forging stronger Commonwealth commerce ties.
This weekend Darren Jones, chair of Parliament’s influential Enterprise Committee has written to Enterprise Secretary Kwasi Kwarteng to lift considerations about China’s stake. Jones demanded that the hyperlink is carefully scrutinised alongside Eutelsat’s broadcasts of Russian tv throughout the warfare in Ukraine.
Former Tory chief Iain Duncan Smith, who’s a member of a gaggle warning of Beijing’s affect, believes the Authorities must cease OneWeb’s sale for nationwide safety causes.
He stated: ‘China is a direct menace now to the UK and its pursuits. We merely can not permit it to have entry both to our expertise or to realize monetary benefit on account of a British expertise firm. I’m positive now, armed with this info, the Authorities will block this sale.’
OneWeb is a pioneer of communications networks by lower-Earth orbit satellites. It was bailed out by Boris Johnson’s Authorities in 2020.
The merger values OneWeb at £2.8billion and the British taxpayer’s stake at virtually £500million. The merger, which might assist problem the likes of Elon Musk’s SpaceX’s Starlink, is anticipated to be accomplished by the center of subsequent yr.
Former Science Minister George Freeman has accused the Authorities of handing expertise away on a budget.
Authorities sources stated the merger plan had been reported to Whitehall officers for evaluate, however they confused that China will ‘don’t have any entry to any info or affect’ over OneWeb.
The sale has been billed as a ‘merger of equals’ and it has been claimed that OneWeb’s UK future will probably be safeguarded by a particular Authorities share.
This may give Britain powers to dam any transfer overseas, in addition to first desire for provide chain alternatives.
Eutelsat, listed in Paris, has beforehand been criticised for its Chinese language and Russian hyperlinks.
Final yr it got here underneath fireplace over human rights violations for broadcasting Chinese language TV channels that aired compelled confessions. It has additionally been accused of broadcasting Kremlin propaganda by the charity Reporters With out Borders, which claimed Russia was Eutelsat’s second greatest shopper in 2021.
Kwarteng has the power to dam the deal underneath the Nationwide Safety and Funding Act. However Jones warned Kwarteng he’s ‘conflicted’ as a result of he has affect over Britain’s OneWeb stake in addition to presiding over the safety legal guidelines.
He stated his committee should due to this fact be granted ‘enhanced scrutiny’ over the deal.
China’s stake in Eutelsat has fallen from seven per cent to lower than 4 per cent and insiders insist this can drop to 1.8 per cent underneath the merger. Nonetheless, the CIC will nonetheless be capable of purchase shares on the open market. Eutelsat stated: ‘CIC has by no means had a seat on Eutelsat’s board, has by no means been concerned in any side of Eutelsat’s governance or operations and has by no means had entry to any private info.’
However one Metropolis grandee, talking on situation of anonymity, stated Chinese language stakes in politically delicate companies could be more likely to have a long-term intention of monitoring or in the end buying key mental property.
Conservative MP Bob Seely, a member of the highly effective International Affairs Committee, stated: ‘We’ll should get a coherent coverage on how we deal with China’s communist social gathering and state enterprises in our dealings with delicate UK firms.
‘There’s a naivety about how now we have handled China which is fallacious and opposite to our nationwide pursuits.’
OneWeb declined to remark.