Security scare over China’s £100m swoop on UK data firm
THE Chinese have quietly taken control of a £5 billion, London-based company that stores vast amounts of highly sensitive data, sparking fears for Britain’s national security.
Politicians and experts last night called for the security services to investigate the £ 100 million share swoop over the New Year that gave Chinese investors majority control over Global Switch, Europe’s largest data centre operator.
The Australian government has already said it will to move files from its Department of Defence out of a Global Switch site in Sydney, due to concerns that Communist officials in Beijing could access military secrets.
But security expert Professor Anthony Glees accused t he UK Government of ‘failing to take this threat as seriously as it should’, adding that Ministers were ‘so obsessed’ with attracting foreign investment that they risked ‘throwing national security to the four winds’.
Conservative MP Nigel Evans al so questioned the deal. ‘If other countries like Australia have had deep concerns, then why is it we don’t?’ he said.
A group of Chinese investors operating as a consortium called Elegant Jubilee increased its stake to 51 per cent in the company in discreet dealings between Christmas and the New Year. The power- grab went almost unnoticed because most people were on holiday.
The Chinese have been investing heavily in UK infrastructure over the past few years, including Hinkley Point nuclear power station and National Grid gas pipelines.
Elegant Jubilee was put together by Li Qiang, the founder of Chinese data centre firm Daily- Tech, and is led by Jiangsu Sha Steel Group, China’s largest private steel-maker.
They say they are independent investors with no links to the Chinese state.
However, Prof Glees said: ‘ The Chinese Communist Party has a finger in every single significant pie.’ He added that control of Global Switch could give China ‘very easy access to vast quantities of Western data’. ‘ Were there to be a conflict between us at some point, the Chinese would be extremely well-placed not just to shut down our energy supplies but to use our own data against us,’ he said.
Labour MP Dan Jarvis, a former paratrooper who sits on the Joint Committee on the National Security Strategy, said: ‘ We would never countenance replacing the Royal Marine Fleet Protection Group that guards our nuclear weapons with a foreign-owned security company.
‘Yet we seem happy to entrust our intellectual property to another country. This is muddled thinking.’
Previously, Global Switch was controlled by the Reuben brothers, property tycoons David and Simon, whose £ 14 billion fortune puts them among the richest men in Britain. They own the other 49 per cent of the company.
They sold a £2.4 billion stake to the Chinese investors behind Elegant Jubilee in December 2016, provoking the Australian government’s move.
Global Switch was founded in 1998 by Andy Ruhan, a Birmingham-based property and telecoms mogul.
It is now one of Britain’s biggest private companies with 11 warehouses around the world, including two in London’s financial district of Canary Wharf. It stores huge amounts of confidential data for banks, governments and companies, including BT.
Global Switch said the Reuben brothers would continue to control the business jointly with their Chinese investors. A Global Switch spokesman described the company as a property firm and said it had ‘no access to any customer data’ stored in its facilities, and a security agreement restricted investors’ access to data centres.
A spokesman for the Department of Business, Energy & Industrial Strategy said the deal was‘ a commercial matter’.
‘UK is not taking threat as seriously as it should’