MI5 investigated attempted Chinese takeover of British satellite company

MI5 investigated an attempted Chinese takeover of the British satellite company OneWeb before Boris Johnson’s government rescued the company with £400m in taxpayer money, documents have revealed.

Security services were monitoring Chinese bidders circling the satellite internet company after it declared bankruptcy in 2020, according to a report from Parliament’s Intelligence and Security Committee.

It comes as OneWeb is set to be sold to the French satellite giant Eutelsat, whose partial ownership by a Beijing-backed investment firm has raised new security fears.

It is understood that the China Aerospace Science and Technology Corporation, the state-owned space contractor, was among those considering investment in the satellite company before the Government stepped in.

A committee report on China says the Government’s Investment Security Group opened a case on OneWeb when the company, which aims to provide satellite internet to far-flung locations, fell into financial difficulties in early 2020.

It adds that there was an “investigation of the implications of a Chinese aerospace company’s [redacted] move to purchase a UK Low Earth Orbit satellite company, OneWeb”.A section of the committee’s report dedicated to OneWeb is heavily redacted but footnotes show that the committee received extensive evidence from GCHQ, MI5 and the Secret Intelligence Service – known as MI6 – about OneWeb.

OneWeb was eventually bought in a joint venture between the Government and Indian telecoms giant Bharti, in a deal championed by Dominic Cummings, Mr Johnson’s adviser.

The UK now has a golden share in the company which will allow it to veto use of the service by other countries on national security grounds.

British interest in buying the company arrived relatively late in the bidding process, and it is unclear whether the swoop was seen as part of an effort to prevent the technology falling into Chinese hands.

US national security regulators, who approved the sale of OneWeb, would have been almost certain to block a Chinese takeover.

The purchase of OneWeb has been scrutinised by MPs on the Business, Energy and Industrial Strategy Committee over whether it represented value for money but criticised the Government for a lack of transparency on the matter.

The Intelligence and Security Committee said the BEIS Committee was not able to scrutinise the investment, but redacted the reasons why.

OneWeb has more than 630 satellites in the sky today and is expected to provide global service next year.

Its rival service, Elon Musk’s Starlink, has been a vital tool for Ukrainian soldiers fighting Russia, and the network has also been seen as a potential satellite positioning system.

China has unveiled plans for its own satellite internet system but its first launches are not due until later this year.

Eutelsat agreed a takeover of OneWeb last year that valued the company at $3.4bn (£2.6bn) and the taxpayer’s stake at $600m. However, Eutelsat’s falling share price since then means the Government may make a loss on the 2020 investment.

The state-backed China Investment Corporation has a 3.7pc stake in Eutelsat, which has led to calls from MPs for strict national security vetting of the deal.

Its stake has fallen from around 7pc last summer, while the fund does not have a board seat. Ministers previously said the OneWeb deal would be scrutinised under the National Security and Investment Act.

Britain is set to retain its golden share in OneWeb after the deal closes.

A Cabinet Office spokesman said: “As noted in the report, the Cabinet Office-led Investment Security Group – since superseded by the Investment Security Unit – opened a case on OneWeb once it became aware of the company’s financial difficulties. We are unable to comment on the process further to this.”

OneWeb declined to comment. The Telegraph