The sell-off of a leading UK handset technology provider, which is owned by Roman Abramovich, has been halted by the government amid a national security probe into the deal.
Sky News has learned that officials at the Department for Business, Energy and Industrial Strategy (BEIS) this week issued an injunction to block the purchase of Truphone’s assets by Hakan Koc, a billionaire German entrepreneur.
The order, issued under the new National Security and Investment Act, means the sale to Mr Koc cannot go ahead until a review is complete.
Kwasi Kwarteng, the business secretary, is said to have signed the decision.
This weekend it was unclear on what basis the order had been issued, although it is said to have been initiated by the security services.
Truphone is a mobile virtual network operator in nine countries that focuses on international corporate customers such as investment banks.
City sources said Truphone had an embryonic remote SIM deployment deal with BT Group, which they say may have sparked concerns about the deal.
They added that Mr Koc had indicated that he and co-acquirer Pyrros Koussios were willing to exclude that deal from their purchase of Truphone’s assets.
The contract between the contractors and Truphone consultants is said to be for £1 but is also said to include significant deferred consideration based on the company’s performance.
The delay in selling Truphone’s assets comes at a difficult time for the loss-making company.
It’s said it will be within weeks if it runs out of money, which could mean its directors have little choice but to put it into administration if the deal doesn’t go through.
More than 400 people work for the company in the UK and overseas.
A sales process has already been carried out for Truphone in recent months, with Mr. Koc being selected exclusively as the preferred bidder.
A source said the issuance of the injunction had the “perverse” result of effectively leaving Truphone in the possession of an already-sanctioned Russian oligarch for an extended period of time.
Mr Abramovich and two Russian business partners are said to have invested more than £300m in Truphone during their time as shareholders.
The oligarch has already spearheaded the most high-profile sale of a British asset since Vladimir Putin’s invasion of Ukraine in the form of the £2.5billion sale of Chelsea Football Club.
Mr. Koc is a German-born businessman who co-founded the used car platform Auto1.
The Frankfurt-listed company last year, and although its valuation has since fallen in line with listed tech stocks around the world, Mr. Koc’s status has crystallized among the super-rich.
The government has come under pressure to demonstrate that the new national security laws will be applied rigorously, leading to Mr Kwarteng’s department saying last month they were working well – despite concerns expressed by a number of leading law firms in the country city were expressed.
“The Government is fully focused on growing our economy and upgrading all parts of the UK, but that will not come at the expense of our national security,” he said.
“This report shows that our new investment review process is working.
“It’s simple and fast, giving businesses speed and confidence to do business in a way that protects the security of the UK.”
In all, more than 200 transactions were reported to the government in the first three months after the law went into effect, with 17 transactions requested by officials.
On Saturday, Mr Koc declined to comment, while a government spokesman said: “While commercial transactions remain primarily a matter for the parties involved, the government routinely monitors acquisitions across the economy in the event of national security concerns.
“The Secretary of Commerce has authority under the National Security & Investment Act to intervene in acquisitions when necessary.”
A City insider close to the proposed Truphone deal said the decision to convene it, with the potential risk to jobs, raises questions about whether the new law will be applied correctly.
“The government risks throwing the baby out with the bath water,” the person said.
Kwarteng uses new national security law to halt sale of Truphone assets | business news
Source link Kwarteng uses new national security law to halt sale of Truphone assets | business news