UK Pressed Over Conflict Of Interest Risk For Oneweb Deal
Date
7/31/2022 10:52:38 PM
(MENAFN- The Peninsula) Bloomberg
The Minister in charge of the UK's OneWeb stake is also responsible for approving its merger with France's Eutelsat Communications SA, creating a conflict of interest, according to the head of an influential committee of lawmakers.
'You are clearly conflicted in this process as both the decision maker under the National Security and investment Act and the government lead for our shareholding in OneWeb,” Darren Jones, chair of Parliament's committee for Business, energy and Industrial Strategy, wrote in a letter to Business Secretary Kwasi Kwarteng on Friday.
New UK takeover laws that came into effect in January grant officials new national security powers to review corporate deals, including the ability to pull apart acquisitions retrospectively. Jones asked Kwarteng to explain by Aug. 12 how he'll manage the alleged conflict and confirm that his committee will be given 'enhanced scrutiny” of the deal.
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'We have steps in place to prevent a conflict of interest for decisions undertaken within the remit of the National Security and Investment Act, with procedures that allow a decision to be delegated to avoid a conflict of interest,” a BEIS spokesman said by email.
'We have steps in place to prevent a conflict of interest for decisions undertaken within the remit of the National Security and Investment Act, with procedures that allow a decision to be delegated to avoid a conflict of interest.”
The UK bought OneWeb out of bankruptcy in 2020 in a controversial $500 million bet with taxpayers' money on its constellation of small satellites that beam internet connections from low-earth orbit. On Tuesday Eutelsat and OneWeb agreed to merge to better compete with other ventures like Elon Musk's Starlink -- giving Britain and Eutelsat shareholder France significant stakes and board seats in the process.
A separate minister in Kwarteng's Department for Business, Energy and Industrial Strategy would be responsible for the national security review, according to a person familiar with the business secretary's thinking, who asked not to be named because the discussions are private.
In the letter, Jones also asked Kwarteng to address concerns about Eutelsat's role in broadcasting Russian TV, 'allegedly including propaganda about the Russian war in Ukraine,” and Eutelsat's minority shareholding by the Chinese government.
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