Imagination Technologies has had quite the year. In April, while businesses across the country were shuttering offices to cope with the pandemic, the 35-year-old chip designer was instead battling a bitter boardroom row — one which came to be at the heart of Whitehall concerns over Beijing’s influence on UK tech.
For Imagination, based in the idyllic village of Kings Langley, the dispute revolved around its Chinese-funded owners and their attempts to appoint four nominees to its board.
Internally, the move had met a backlash and, ultimately, led to the departure of boss Ron Black. But, more widely, it re-opened old wounds, seemingly justifying MP concerns first voiced when Canyon Bridge purchased Imagination in 2017 over its largest shareholder, state-backed China Reform Holdings.
It was a plot which was, ultimately, abandoned after an intervention by Culture Secretary Oliver Dowden. But, in the time since, the company has found itself touted as an example of a British technology company at risk of foreign influence.
It may seem like a particularly thorny situation to enter into, but new boss Simon Beresford-Wylie was not deterred. In fact, he was the one who contacted a search firm and asked them to put his name forward for the vacant CEO post. "If you’re tech-savvy, you read about companies like Arm and Imagination," the Australian says.
Ron Black stepped down from Imagination earlier this year
Credit: David Rose
Initially, recruiters weren’t too sure, warning the 62-year-old that he did not have the “requisite experience”. After all, Imagination is a British leader in semiconductor designs, and Beresford-Wylie had just finished up a stint as CEO of TV and radio mast giant Arqiva. Before then, he had held posts at Nokia and Samsung.
But, he says, he "told them to humour me, and they did.”
Now, months later, Beresford-Wylie has been installed at Imagination for just over two weeks. The company had formed a “management executive bubble” so he could meet the team, whose offices are just a 30-minute drive from his home in Ascot. However, a case of Covid-19 last week meant staff had to once again go back to remote working.
Many at Imagination are hopeful Beresford-Wylie will prove the “stable pair of hands” the company has been in need of for quite some time. “I’m not sure if that’s a good way or bad way to be described, but there’s a joke going around the building that it’s just as well Imagination has a revolving door, with the number of CEOs it has had,” he laughs.
Still, he admits he feels he is being watched “with a microscope” as to how he will steer the company through what has, unquestionably, been one of its most tumultuous periods.
New boss Beresford-Wylie downplays the recent drama, arguing that much of the coverage over the dispute was blown out of proportion. “Things can be distorted. I suspect there is an alternative narrative that is nowhere near as bad,” he says.
Take claims, for example, that the board changes were part of Beijing plans to gain control of Imagination’s verification technology, which it uses to prove its chips work, to find vulnerabilities in networks — roundly rubbished by Imagination. “We do relatively boring stuff,” Beresford-Wylie says. “Some of it we need to be careful about, but if you were a manufacturer of Wellington boots, you could say they were dual use.”
“Anything can be used by anyone. We’re very careful in what we do.”
It is not just censure from MPs that Imagination has had to deal with. Former Imagination bosses have also voiced their concerns over the future of the business. Sir Hossein Yassaie, who stepped down from the company four years ago, notably wrote to MPs to warn that China Reform was using what he termed “Covid cover” to change the structure of Imagination. He was called to speak at a recent parliamentary session into the matter.
Sir Hossein Yassaie and Imagination Technologies: Ups and downs
Beresford-Wylie is critical of such input. “Look, it’s a free world, these people can say what they want, but I would never as a CEO comment on my previous employer.”
In his view, “if things had been completely unstable, a lot more people would have left”.
Perhaps he is right, but there have been some significant departures. Last week, John Rayfield, who handed in his resignation earlier this year alongside former boss Black, decided to follow through on the departure. Steve Evans, Imagination’s chief revenue officer, is still weighing up whether to crystallise his own resignation. “He’s giving it a thought,” Beresford-Wylie says.
Right now, Beresford-Wylie says staff are trying to work out what the future is for the company. "They’re thinking ‘can I work with this person and do I actually want to? Can we do something?’. It’s obviously down to individual decisions.”
But, while Beresford-Wylie says he would not replace anyone in the executive team, he says “no-one is indispensable”. For Rayfield’s role, for example, “we already have some stellar candidates”.
The new chief executive may be keen to draw a line under the turmoil earlier this year. He calls Imagination "a great iconic UK company that needs a bit of leadership", but it may not be that easy.
In the next few weeks, the Government is set to unveil its national security and investment bill — a bill which, some say, could include “retrospective measures” on takeovers which have already taken place and which allowed state-backed entities to gain control of British tech firms.
For Imagination, a company bought by Canyon Bridge back in 2017 for £550m, this could prove a huge headache.
“I’ve not engaged with the government directly around this. But as a principle, I’m uncomfortable with retrospectivity because in business you need certainty,” Beresford-Wylie says. “Retrospectivity as a tool for government, how do you plan for that?”
There are some arguing that Imagination should join the public markets again to eschew concerns over its state-backed owners — a direction the company appeared to be moving towards, with chairman and Canyon Bridge partner Ray Bingham saying back in April that the “objective would be an IPO within the next few years”.
Beresford-Wylie, however, is less certain. An IPO, he says, is just one option. “I’ve been through trade sales, mergers, those things happen at the right time based on where you are with the value relative to the clarity of the direction of the company. It’s there, but it’s not something I’m focused on at all.
“There could be a trade sale, it may be that another private equity firm comes. An exit can take many different paths, and it’s way too soon to even think about that.”
Right now, Beresford-Wylie is laser-focused on what he can do to grow the company. Prior to the row this year, Imagination had been ramping up its focus on selling into the China market, an effort to diversify its business away from selling primarily to Apple. This is a push he is planning to continue.
“China is a huge market now. The fact that it is disconnecting to some extent from the supply chain that goes into the US and vice versa, for a UK company that is sensitive to these things, opportunities will emerge — most definitely.
“We just need to be careful as we engage with customers there, that we are very mindful of where the boundaries are in terms of how we know how we engage with that market and how we don’t engage with that market.”
He says the company may have to wait and see how the “dust settles”. But, Beresford-Wylie appears in no rush. He says he has committed to be here for the next five years. “It takes that long to have an effect.”
And, in that time, “hopefully the revolving door will cease to operate”.
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