OneWeb aims to bring internet to remote places with its low-orbit satellites. Credit: ROSCOSMOS/REUTERS
MI5 investigated attempt Chinese takeover of British satellite company OneWeb before Boris Johnson's government bailed out the company with £400 million in taxpayer money, documents show.
Security services monitored by Chinese bidders who declared a satellite internet company after it filed for bankruptcy in 2020. , according to the report of the parliamentary committee on intelligence and security.
This comes as OneWeb will be sold to French satellite giant Eutelsat, whose partial ownership by a Beijing-backed investment firm has raised new security concerns.
It is understood that the China Aerospace Science and Technology Corporation, a state-owned space contractor , was among those who considered investing in a satellite company before the government intervened.
A China committee report says the government's investment security group filed suit against OneWeb when a company that aims to provide satellite internet to remote areas ran into financial difficulties in early 2020.
Added that there was an “investigation into the consequences of [redacted] a move by a Chinese aerospace company to buy British low-orbit satellite company OneWeb.”
How low-earth orbit satellites work
The to OneWeb section of the committee's report is heavily redacted, but the footnotes show that the committee received extensive evidence from GCHQ, MI5, and the Secret Intelligence Service known as MI6 regarding OneWeb.
OneWeb was ultimately purchased as part of a joint venture between the government and Indian telecommunications giant Bharti in a deal championed by Dominic Cummings, an adviser to Mr Johnson.
The UK now has a golden share in the company, which will allow it to veto other countries' use of the service on national security grounds.
The British became interested in buying the company relatively late in the bidding process, and it's not clear if the raid was seen as part of an attempt prevent technology from falling into the hands of the Chinese.
U.S. national security regulators who approved the sale of OneWeb would almost certainly have blocked a takeover by China.
The purchase of OneWeb was scrutinized by deputies of the Business, Energy and Industrial Strategy Committee for value for money, but criticized the government for its lack of transparency on the issue.
The Intelligence and Security Committee said the BEIS committee failed to scrutinize the investment, but edited out the reasons for this.
Today, OneWeb has more than 630 satellites in the sky and is expected to year they will provide global services.
Its rival service, Elon Musk's Starlink, was a vital tool for Ukrainian soldiers fighting Russia, and the network was also seen as a potential satellite positioning system.
Number of satellites in orbit < p>China has unveiled plans to build its own satellite internet system, but its first launches are scheduled for the end of this year.
Last year, Eutelsat negotiated a takeover of OneWeb, valuing the company at $3.4bn (£2.6bn) and a taxpayer share of $600m. However, the fall in Eutelsat's share price since then means the government could suffer losses on the investment in 2020.
The state-backed China Investment Corporation owns a 3.7% stake in Eutelsat, prompting MPs to call for strict national security scrutiny of the deal .
Last summer, its share fell from about 7%, and the fund does not have a seat on the board of directors. Ministers have previously said that the OneWeb deal will be scrutinized under the National Security and Investment Act.
The UK intends to keep its gold stake in OneWeb after the deal closes.
Cabinet Spokesman The ministers said: “As noted in the report, the investment security group, led by the cabinet — since it was replaced by the investment security unit — opened a case against OneWeb as soon as the company’s financial difficulties became known. We cannot comment on the further process.”
OneWeb declined to comment.
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