Calls to probe sale of taxpayer-backed OneWeb over links to Beijing

Satellite giant suitor paid £150m to China: Influential MPs call to investigate taxpayer-backed OneWeb sale for links to Beijing

  • Eutelsat said it had reached an agreement to merge with OneWeb
  • But the Chinese connection has raised security concerns about the plan.
  • Payments made to CIC, one of the main shareholders of Eutelsat
  • Britain’s stance on Chinese investment has hardened in the Tory leadership election

The French communications group that swooped in on British satellite giant OneWeb has handed over £150m to the Chinese state in the last decade.

Eutelsat said last week that it had reached an agreement to merge with OneWeb, which is backed by taxpayers. But the Chinese connection has raised security concerns about the plan, which will mean Britain sits alongside China as an investor in the enlarged group.

The Mail on Sunday may reveal that the payments have been made in the form of dividends to China Investment Corporation (CIC), one of Eutelsat’s largest shareholders since it bought a seven per cent stake 10 years ago. Britain’s stance on Chinese investment has hardened during the Tory leadership election.

Rishi Sunak said last week that the superpower posed Britain’s “greatest long-term threat”, while Liz Truss vowed to counter China’s dominance by forging stronger trade ties with the Commonwealth.

This weekend, Darren Jones, chairman of Parliament’s influential Business Committee, wrote to Business Secretary Kwasi Kwarteng to express concern about China’s involvement. Jones demanded that the link be closely examined along with Eutelsat broadcasts of Russian television during the war in Ukraine.

Former Tory leader Iain Duncan Smith, a member of a group that warns of Beijing’s influence, believes the government will have to stop the OneWeb sale on national security grounds.

He said: ‘China is a direct threat now to the UK and its interests. We simply cannot allow you to have access to our technology or gain a financial advantage as a result of a British technology company. I am sure that now, armed with this information, the Government will block this sale.

OneWeb is a pioneer in communications networks through low earth orbit satellites. He was rescued by the Government of Boris Johnson in 2020.

The merger values ​​OneWeb at £2.8bn and the British taxpayer’s stake at almost £500m. The merger, which could help challenge Elon Musk’s SpaceX Starlink, is expected to be completed by the middle of next year.

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Former Science Minister George Freeman accused the government of giving away technology cheaply.

Government sources said the merger plan had been reported to Whitehall officials for review, but stressed that China “will not have access to any information or influence” over OneWeb.

The sale has been billed as a “merger of equals” and it has been claimed that OneWeb’s future in the UK will be protected by a special government holding.

This will give Britain powers to block any movement abroad, as well as first preference for supply chain opportunities.

Paris-listed Eutelsat has previously been criticized for its links to China and Russia.

Last year he came under fire for human rights violations for Chinese TV channels broadcasting forced confessions. He has also been accused of broadcasting Kremlin propaganda by the charity Reporters Without Borders, which claimed that Russia was Eutelsat’s second-biggest customer in 2021.

Kwarteng has the ability to block the deal under the National Security and Investment Law. But Jones warned Kwarteng that he is “conflicted” because he has influence over Britain’s OneWeb stake, as well as presiding over security laws.

He said his committee should therefore receive “enhanced scrutiny” on the deal.

China’s stake in Eutelsat has fallen from seven percent to less than four percent and experts insist it will drop to 1.8 percent with the merger.

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However, the CIC will still be able to buy shares on the open market. Eutelsat said: ‘CIC has never held a Eutelsat board position, has never been involved in any aspect of Eutelsat’s governance or operations and has never had access to non-public information.’

But a senior city official, who spoke on condition of anonymity, said Chinese holdings in politically sensitive businesses would likely have the long-term goal of monitoring or ultimately acquiring key intellectual property.

Conservative MP Bob Seely, a member of the powerful Foreign Affairs Committee, said: “We are going to have to get a consistent policy on how we treat the Chinese Communist Party and state-owned companies in our dealings with sensitive UK companies.”

“There is a naïveté about how we have treated China that is wrong and contrary to our national interests.”

OneWeb declined to comment.


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