Investment in Vodafone by the United Arab Emirates is a safety threat, the Government has declared.
Deputy Prime Minister Oliver Dowden stated the near-15 per cent stake held by state-controlled Emirates Telecommunications poses a risk to Britain given Vodafone’s work with Government departments and its affect on the UK telecoms trade.
The Cabinet Office has instructed the companies to deal with these points.
The order got here hours after Culture Secretary Lucy Frazer ordered additional regulatory scrutiny of the Abu Dhabi-backed funding group Redbird IMI’s £600million bid for the Telegraph newspaper group.
Ofcom and the Competition and Markets Authority (CMA) are reviewing the deal and are as a result of report back to Frazer right now.
Security alert: Emirates Telecommunications is 60%-owned by the UAE authorities and has been constructing a holding in Vodafone, which is run by Margherita Della Valle (pictured)
Emirates Telecommunications is 60 per cent-owned by the UAE authorities and has been constructing a holding in Vodafone, which has been run by Margherita Della Valle since 2022.
Also known as e&, it now has a 14.6 per cent stake in Vodafone – and is the most important shareholder.
In May it introduced a strategic partnership which landed e&’s chief government Hatem Dowidar a seat on the Vodafone board.
But Dowden has now stated this association would enable it to ‘materially influence’ the enterprise and ordered Vodafone to determine a nationwide safety committee to supervise delicate work that impacts the UK.
It should additionally inform ministers about any change or termination of the partnership and meet sure necessities about who’s on the board.
Karen Egan, a senior telecoms analyst at Enders Analysis, stated dangers included cyber assaults, interception and networks being shut down. But the order refrains from blocking the tie-up, which means a partnership might be shaped.
This comes regardless of accusations of on-line censorship at e& and alleged makes an attempt to spy on its residents. Vodafone stated it was ‘pleased to have received clearance in our home market for our strategic relationship’.
The Government has powers to evaluate international takeovers beneath the National Security and Investment Act, which got here into drive in 2022, and was used to dam the sale of Newport Wafer Fab – one among Britain’s few semiconductor corporations – to Chinese-owned Nexperia.
But Vodafone can be going through a probe by the UK’s competitors regulator amid its deliberate merger with Three.
The CMA stated yesterday it supposed to open an investigation into the deal ‘very shortly’.
It got here after a PR consultant for Vodafone and Three mistakenly launched an announcement that was not as a result of be printed till the CMA inquiry was introduced, which contained feedback from the UK bosses of each corporations arguing that the merger would ‘significantly enhance’ competitors and funding.
Vodafone and Three introduced plans in June to create a £15billion three way partnership, that may be 51 per cent-owned by Vodafone and 49 per cent by Hong Kong’s CK Hutchison, proprietor of Three.