CEO and execs to resign if China takes control of Imagination

According to Sky News, CEO Ron Black and several other senior executives at Imagination will resign if China Reform Holdings , a China government-controlled entity, goes ahead with the appointments at today’s emergency board meeting.

China Reform Holdings is the biggest shareholder in Imagination’s owner – the Cayman Islands-registered private equity company Canyon Bridge which bought Imagination for £550 million in 2017.

It is understood that the proposed board appointments are a preliminary to re-domiciling Imagination in China.

It is said that China Reform Holdings gave assurances at the time of the takeover that it would be a passive investor only. It is said that assurances were given that there were  “no plans to make any changes to the continuing employment of employees and management” and that there was no intention “to change the principal locations of Imagination’s places of business, or redeploy any fixed assets of Imagination”.

Four chairmen of Commons select committees have written to No.10 asking that the government should step in to stop the appointments being made.

David Davis, the former Brexit secretary, has asked the culture  secretary Oliver Dowden to “intervene to ensure that this change of control does not take place”. Davis asks whether the government had powers to stop “British-owned intellectual property passing into Chinese ownership”, whether it had a list of British technology companies that could not be sold into Chinese control, and if there are “any legal mechanisms in place to stop people who work directly or indirectly for the Chinese state sitting on British company boards”.

In January, Imagination signed a licensing deal with Apple which could mean that the US government could also see a reason to intervene in the situation.