The Chinese government has a stake in a firm which is bidding to take over 120-year-old Cambridge-based Sepura.
An attempted Chinese takeover of a firm which makes radio equipment for Scotland Yard has prompted fears the deal could compromise national security.
The Chinese government has a stake in a firm which is bidding to take over 120-year-old Cambridge-based Sepura.
Business Secretary Greg Clark was understood to have been handed a report by the UK competition regulator outlining possible national security issues.
Germany is one of Sepura’s largest markets and its government is also reviewing the deal ‘on public policy and/or national security concerns’ .
Sepura makes walkie-talkies for the Metropolitan Police and other emergency services.
The company, which was founded in 1896 and made radios and radars in the Second World War, is in the middle of a takeover bid from Hytera, a Chinese tech firm.
It is seen as hugely important to public safety due to its contracts with law enforcement agencies. It also supplies oil, gas and mining companies.
Shares in the company slumped by 26 per cent in London, as bosses fought to save the deal.
Hytera is 52 per cent owned by its chairman Chen Qingzhou, a self-made billionaire who started his career as a sales manager in a mobile communications factory.
China’s National Social Security Fund, a sovereign wealth fund, owns 1.79 per cent of its shares.
Prime Minister Theresa May has been under increasing pressure to intervene in foreign takeovers that threaten key British industries.
Last July she postponed a decision on a new £18billion nuclear power station which was backed by the Chinese.
The new plant at Hinkley Point in Somerset is being financed by the French and Chinese governments.
It was eventually approved in September with ‘safeguards’ to protect national security.
Last year there were also concerns over Hikvision, an electronics company controlled by the Chinese government, which has sold more than a million CCTV cameras and recorders to sensitive British sites including airports and government buildings.
Justin Hayward, of Cambridge Investment Research, a consultancy, said the takeover was not a national security issue but ‘a sensible strategic move’ which brings investment to the UK and Cambridge.
‘The possible UK government intervention threatens all this,’ he added.
The Department of Business, Energy and Industrial Strategy said: ‘The Competition and Markets Authority report has now been received and we will be responding in due course.’
Responding to the German intervention, Sepura and Hytera said they were in the process of ‘assessing any potential impact on the completion of the acquisition and will be engaging with the ministry’ .
