Jeffrey Henderson (Professor Emeritus of International Development) recently acted as a specialist witness to the House of Commons Foreign Affairs Committee’s (FAC) investigation into corporate ‘asset stripping’ by foreign-owned companies. Triggered by governance issues in the Hertfordshire-based semiconductor firm, Imagination Technologies – which since 2017 has been owned by the Chinese equity funds Canyon Bridge and (state-owned) China Reform Holdings – the FAC is investigating whether the Government’s National Security and Investment bill (currently undergoing Parliamentary scrutiny) should include provision for a regulatory regime able to block foreign takeovers of strategically significant companies.
Among other things, Professor Henderson stressed that in addition to Chinese takeovers of British companies, US takeovers should also be regarded as potential causes for concern. In support of this, he gave the example of the imminent acquisition of the Cambridge-based semiconductor company, ARM by the US video graphics and AI producer, Nvidia. In terms of regulatory procedures, he argued that Germany and the USA were prominent examples of countries that operated far more robust systems than those currently existing in Britain, and might provide models for how to proceed here. An administratively simpler way of dealing with the issue, however, might be for the Government to take a ‘golden share’ in those companies deemed at risk of inappropriate takeover (thus, amongst other things, placing a Government non-executive director on the boards of those companies). He suggested that the possibility of such a strategy was one of the very few benefits that Britain will gain from its exit from the European Union and the single market.
Professor Henderson was identified as an appropriate witness by the FAC because of his work on Chinese corporate acquisitions in Europe. This work is being conducted in relation to the China in Europe Research Network (CHERN) which is an initiative of the University of Bristol and the Vrije Universiteit Amsterdam and is funded by the EU’s Cooperation in Science and Technology programme (COST). Professor Henderson is Vice-Chair of CHERN.