UK blocks Hong Kong-based firm’s takeover of tech firm Pulsic over security concerns

The UK government has blocked a proposed takeover of an electronic design firm by a Hong Kong-based company on national security grounds.

and order Commerce Secretary Kwasi Kwarteng, issued on August 17, ruled that Super Orange HK Holding Limited’s takeover of Bristol-based Pulsic Limited should not proceed.

Kwarteng said the decision was “necessary and appropriate to mitigate risks to national security.”

The Department of Business, Energy and Industrial Strategy (BEIS) said Pulsic’s intellectual property and software could be used to “facilitate the construction of state-of-the-art integrated circuits that can be used in civilian or military supply chains.” I’m here.

The company’s electronic design automation tools “could be abused to automatically and/or without the user’s knowledge introduce features into designs that can be used to build defenses and technical capabilities.” BEIS said.

tech security

The move was the latest attempt by the British government to limit China’s involvement in British business, especially in the technology sector.

The decision was made under the National Security Investments Act of 2021, which took effect January 4. The law is perhaps the biggest change to the UK national security regime in 20 years.

The law gives the government new powers to scrutinize and intervene in certain acquisitions by anyone, including companies and investors, that could harm Britain’s national security.

In July, Kwarteng used the law to block Beijing Infinite Vision Technology Co. from buying visual sensing technology from the University of Manchester.

By law, Kwarteng is also presiding over an investigation into the acquisition of Newport Wafer Fab by Nexperia, the Netherlands-based subsidiary of Chinese smartphone maker Wingtech Technology.

Truss Emphasizes Investment Screening

Kwarteng’s decision signals Britain’s growing fears about China’s involvement in the UK economy at a time when bilateral relations have soured over human rights and security concerns.

Foreign Secretary Liz Truss, now the frontrunner in the race to succeed Boris Johnson as leader and prime minister, said on 17 August that the Chinese Communist government’s hardline stance was a “serious security concern” for Britain. ‘ said.

Speaking at the Conservative leaders’ rally in Belfast, she said: We developed it to ensure that we had to clear investment screening and were unable to acquire key strategic assets. “

“And we need to make it clear that we should not strategically depend on China the way Europe depended on Russia,” she added.

PA Media contributed to this report.

Alexander Chan