LONDON • British Prime Minister Boris Johnson is preparing to announce tough laws to prevent foreign takeovers that pose risks to national security amid growing concern about the influence of China, The Times newspaper reported.
Mr Johnson is said to be pressing for legislation to make it mandatory for companies to report attempted takeovers which could give rise to security risks, backed by the threat of criminal sanctions, according to the newspaper.
Companies that fail to report takeovers or ignore conditions imposed by the UK government after takeovers could see their directors jailed, disqualified or fined.
The approach, which is being pushed by the Prime Minister’s adviser Dominic Cummings, is said to have the support of Finance Minister Rishi Sunak and will require businesses to declare when a foreign company tries to buy more than 25 per cent of shares, purchase assets or intellectual property, The Times said.
Mr Johnson also wants academic partnerships and research projects to be included under the rules.
The legislation, which The Times said could be tabled within weeks, comes at a time of increased tension between Britain and China, after the country designated Chinese telecom giant Huawei a “high-risk vendor” in January and expressed concern over Beijing’s handling of the situation in Hong Kong.
Mr Johnson has also come under pressure from the United States and lawmakers from his own Conservative Party, who have argued that Huawei’s equipment could be used by Beijing for spying, an allegation that the Chinese company has repeatedly denied.
The Sunday Times, meanwhile, reported China’s ambassador to the UK as saying that the Huawei issue is being regarded as a “litmus test” of how much Britain wants to do business with China.
Among the high-profile projects potentially at risk are the nuclear plants at Hinkley Point and Sizewell in England.
In an attempt to quieten an ever-louder clamour from lawmakers complaining about the company’s motives for doing business in Britain, Huawei is planning an advertising campaign highlighting its involvement with the UK over the past two decades.
Mr Victor Zhang, Huawei’s vice-president, told the Financial Times the company was not controlled by Beijing and that it was 100 per cent owned by its employees.