UK goverment probing Imagination Technologies chip biz plans over concerns that its IP is headed to overseas
- Reference: 1587020466
- News link: https://www.theregister.co.uk/2020/04/16/uk_gov_is_probing_chip/
- Source link:
Imagination Technologies was [1]acquired by Canyon Bridge in 2017, a private equity firm backed by China Reform Holdings, an investment firm with direct ties to the Chinese Communist Party. Now, Sir Hossein Yassaie, who led the company from 1998 to 2016, believes its technology is at risk of being seized by its Chinese owners amid the current coronavirus pandemic and has asked MPs to look into the matter.
“As a founder and ex-CEO of Imagination Technologies who left the business in 2016, whilst wishing it the best, I have so far intentionally refrained from making public comments about the company,” he [2]said .
“But the recent events at company are so important for the company, its people and our country that I feel I need to speak out and make a few key points, which I have also directly made to our senior government ministers who need to take note (and I have been assured they are) and take necessary actions before it is too late.”
Ron Black [3]stepped down from his role as CEO and Board member of Imagination Technologies last week, only to be replaced by Ray Bingham, who is the Executive Chairman and a partner at private-equity firm Canyon Bridge. The reshuffling has also led to the resignation of other senior staff, including Steve Evans, chief product officer, and John Rayfield, chief technical officer.
Imagination and Apple, sitting in a tree, l-i-c-e-n-s-i-n-g GPU tech semi-secretly: Brit chip designer strikes iGiant deal [4]READ MORE
Imagination Technologies, known for its GPUs and microprocessor core designs, also provides other hardware and software components for cloud computing and networking. Yassaie argued that it “provides critical and sensitive technologies to many key customers around the world who rightfully demand and expect adequate independence, security of supply and trust in the organisation.”
Ministers at the Department of Digital, Culture, Media and Sport have summoned the chairman of Imagination Technologies for questioning. A letter from Oliver Dowden, the Secretary of State for that department, addressed to David Davis, a Conservative MP for Haltemprice and Howden, said that the government was bringing forward legislation that will give it “further powers to scrutinise foreign transactions in the form of the National Security and Investment Bill.”
It is very good that the Secretary of State, [5]@OliverDowden , is intervening in the attempted move by the Chinese of a UK technology company, Imagination Technologies, to China [6]pic.twitter.com/ElSZnRuF4v — David Davis (@DavidDavisMP) [7]April 7, 2020
The Bill was first introduced during the Queen’s Speech in December last year. It will allow the government to assess transactions and investments from foreign parties that could impose a national security risk.
As Canyon Bridge takes over Imagination Technologies, the company could lose crucial IP and skilled workers. Yassaie believes that the Chinese-state backed firm is using the outbreak of COVID-19 to stage a coup.
Canyon Bridge has responded to the Foreign Affairs Committee by promising to keep the company’s base in Hertfordshire, Sky News first [8]reported .
“We welcome the opportunity to respond directly to any questions the Committee may have and address any misunderstandings,” a spokesperson from Imagination Technologies, told The Register . ®
Sponsored: [9]How to Build Your Digital Experience Portfolio
[1] https://www.theregister.co.uk/2017/09/25/imagination_technologies_sold_to_private_equity/
[2] https://www.linkedin.com/pulse/high-time-uk-start-nurturing-protecting-what-matters-sir-hossein/
[3] https://www.imgtec.com/news/press-release/imagination-technologies-commits-to-the-uk-as-it-looks-to-accelerate-growth-in-new-areas-of-technological-innovation/
[4] https://www.theregister.co.uk/2020/01/02/imagination_apple_ip_deal/
[5] https://twitter.com/OliverDowden?ref_src=twsrc%5Etfw
[6] https://t.co/ElSZnRuF4v
[7] https://twitter.com/DavidDavisMP/status/1247457731340046336?ref_src=twsrc%5Etfw
[8] https://news.sky.com/story/imagination-chief-commits-to-uk-workforce-amid-growing-china-row-11973574
[9] https://go.theregister.co.uk/tl/1936/-8578/how-to-build-your-digital-experience-portfolio?td=wptl1936
Two obvious outcomes
1. Lessons will be learned.
2. Next time such a merger is proposed the govt. of the day will approve it.
Ahhh laissez faire government strikes again (and then wrings hand as reiterates 'lessons will be learnt' - until next time)
Um...
" ...by promising to keep the company’s base in Hertfordshire"
I don't think that the location of the company HQ is what we should be concerned about. More important is the transfer of the the IP and other valuable and possibly sensitive information to the Chinese government.
Re: Um...
Damn it! Does that mean the Chinese will have to scrap their plan to move the buildings, brick by brick, to Shenzen? I bet they're furious .
Transfer of IP
It's just the normal consequence of small IT company with IPR selling out to big (rich) company. Of course there's a transfer of IP, it's why they bought the company!
You might want to restrict the sale of a company which is deemed fundamental to national security (not sure that Imagination falls into this category though...), but there's two problems. How do you decide who isn't allowed to buy a company (this year US good, China bad; next year?)? And how do you compensate the entrepreneurs who started the company but now can't cash in?
Because let's face it, that's the favoured business model (and one employed by Imagination itself in growing its IP portfolio).
It is very good that the Secretary of State is intervening
Hmmmm, I thought "Britain is open for business" as that is what ministers have been saying for years now. Did they not actually think that might mean that people came and bought not only the products but the businesses that make them too? Have they not noticed that a lot the world is now being gobbled up by state owned sovereign wealth funds and investment banks? Maybe after ARM got sold, they might have given the issue a little thought afterwards?
Perhaps the Government should set fire to the company
Rather like burning all those 5G Masts to prevent them from spying on us from China and spread coronavirus?