UK preparing tough new laws to prevent Chinese hostile takeovers of British firms
- The UK risks further escalating tensions with China by preparing tough new laws to prevent takeovers of British firms.
- Boris Johnson is reportedly planning new rules which make it compulsory for British firms to report attempted takeovers that could create risks to national security.
- The move comes amid growing tensions between London and Beijing over Covid-19 and Huawei.
- China is also angered by Johnson's pledge to offer millions of Hong Kong residents extended UK visas.
- For more articles, go to www.BusinessInsider.co.za.
The UK is stepping up its action against China by preparing tough new laws to prevent takeovers of British firms.
Prime Minister Boris Johnson risks putting more strain on London's relationship with Beijing by preparing legislation to prevent foreign takeovers that are deemed to pose a risk to UK national security.
Johnson is pushing for new rules which make it compulsory for British firms to report attempted takeovers that could create risks to national security, the Times of London newspaper reported.
The new legislation, which could be tabled within weeks, comes amid increasing concerns about China's growing influence in Britain and fears that UK firms could find themselves exposed to aggressive Chinese takeover bids during the expected coronavirus-induced recession.
Earlier this year, the UK Parliament's Foreign Affairs Select Committee launched an emergency inquiry into an apparent Chinese attempt to take control of AI firm Imagination Technologies, based in southern England.
The new takeover laws proposed by Johnson would require a UK business to declare when a company tries to buy more than 25% of their shares, or to acquire "significant" influence, to purchase assets, or intellectual property.
The new laws would make it a criminal offence for UK companies to fail to report such information, and company directors could be either jailed or fined hundreds of thousands of pounds, the report said.
Firms would have to report any such takeover if there was a risk that it could allow a company or a hostile state the power to undermine British national security by disrupting services or carry out espionage.
Johnson plans to loosen ties with Beijing
Tensions between London and Beijing have increased in recent months amid criticism of how China handled the outbreak of the coronavirus.
Johnson is under growing pressure from Members of Parliament in his Conservative party to loosen ties with Beijing.
A number of Conservative MPs in April set up a new parliamentary bloc called the "China Research Group," which is pressuring Johnson's Conservative government to reset UK ties with China.
The prime minister is expected to reduce the role of Huawei in building Britain's 5G network amid concerns about espionage and national security, after striking a contentious deal with the telecomms firm earlier this year.
Johnson reportedly has a long-term ambition of forming an alliance with the US, Germany, and other nations, that together would develop technology and reduce their dependence on Chinese technology.
China has also been angered by the UK plan to offer millions of Hong Kong residents extended visas to live in the UK if Beijing pressed ahead with contentious new national security laws on the semiautonomous island.
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