The French communications group making a swoop on British satellite tv for pc big OneWeb has handed greater than £150 million to the Chinese language state prior to now decade.
Eutelsat mentioned 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 issues over the plan – which can 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), considered 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 in the course of the Tory management election.
Questions: Eutelsat mentioned it had agreed a deal to merge with OneWeb, which is backed by the taxpayer
Rishi Sunak mentioned final week the superpower posed the ‘largest 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 boost issues about China’s stake. Jones demanded that the hyperlink is carefully scrutinised alongside Eutelsat’s broadcasts of Russian tv in the course of the battle 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 mentioned: ‘China is a direct menace now to the UK and its pursuits. We merely can not permit it to have entry both to our know-how or to achieve monetary benefit on account of a British know-how firm. I’m certain now, armed with this data, the Authorities will block this sale.’
OneWeb is a pioneer of communications networks by way of 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 nearly £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 12 months.
Former Science Minister George Freeman has accused the Authorities of handing know-how away on a budget.
Authorities sources mentioned the merger plan had been reported to Whitehall officers for evaluation, however they pressured that China will ‘don’t have any entry to any data or affect’ over OneWeb.
The sale has been billed as a ‘merger of equals’ and it has been claimed that OneWeb’s UK future shall be safeguarded by a particular Authorities share.
This may give Britain powers to dam any transfer overseas, in addition to first choice for provide chain alternatives.
Eutelsat, listed in Paris, has beforehand been criticised for its Chinese language and Russian hyperlinks.
Final 12 months it got here below hearth over human rights violations for broadcasting Chinese language TV channels that aired pressured confessions. It has additionally been accused of broadcasting Kremlin propaganda by the charity Reporters With out Borders, which claimed Russia was Eutelsat’s second largest consumer in 2021.
Kwarteng has the power to dam the deal below 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 mentioned 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 below the merger. Nevertheless, the CIC will nonetheless be capable to purchase shares on the open market. Eutelsat mentioned: ‘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 data.’
However one Metropolis grandee, talking on situation of anonymity, mentioned Chinese language stakes in politically delicate companies could be more likely to have a long-term goal of monitoring or in the end buying key mental property.
Conservative MP Bob Seely, a member of the highly effective International Affairs Committee, mentioned: ‘We’re going to should get a coherent coverage on how we deal with China’s communist occasion and state enterprises in our dealings with delicate UK firms.
‘There’s a naivety about how we’ve got handled China which is improper and opposite to our nationwide pursuits.’
OneWeb declined to remark.