Chinese close in on UK ‘internet of things’ pioneer

Angelena Iglesia

Fears growing as Chinese close in on UK ‘internet of things’ pioneer By Ben Harrington, Financial Mail on Sunday Published: 16:58 EDT, 15 August 2020 | Updated: 16:58 EDT, 15 August 2020 Powerful activist investors have built up large stakes in UK-listed technology firm Telit Communications amid fears that a […]

Fears growing as Chinese close in on UK ‘internet of things’ pioneer

Powerful activist investors have built up large stakes in UK-listed technology firm Telit Communications amid fears that a China-backed fund wants to take control. 

Telit – an ‘internet of things’ company whose technology helps machines to communicate with each other – hit the headlines in 2017 after allegations that its former chief executive Oozi Cats was a fugitive called Uzi Katz on the run from the US authorities. 

Eddie Stobart haulier owner Dbay Advisors, based on the Isle of Man, has declared it now owns 11.57 per cent of Telit. Its directors include Colin Kingsnorth, who also runs family office Laxey Partners, the scourge of major companies including British Land which it tried to break up in 2003. 

In touch: Telit is an 'internet of things' company whose technology helps machines to communicate with each other

In touch: Telit is an ‘internet of things’ company whose technology helps machines to communicate with each other

Richard Griffiths, the founder of City stockbroker Evolution, has also increased his stake in Telit to 6.07 per cent. 

And earlier this year Hong Kongbased gaming tycoon Tang Hao declared a 3.4 per cent holding through his vehicle Discovery Key Investments. 

Other large shareholders in Telit – whose chief executive is Paolo Dal Pino, chairman of Serie A football league in Italy – include Davide Serra, the founder of the Algebris hedge fund, and Oozi Cats himself. The manoeuvring by powerful investors comes after secretive Chinese multi-millionaire banker Yuxiang Yang joined Telit’s board earlier this summer.

His appointment may raise concern in Westminster that a Chinese businessman with ties to his country’s Communist government could be seeking to gain influence over the business. 

Yang runs China Fusion Capital, the parent company of Run Liang Tai Management, a mysterious investment fund that has built a 15 per cent stake in Telit to become its largest shareholder. 

Sources said some of the firms that have invested in Run Liang are giant Chinese companies, such as coal mining group Wintime Energy and Jiangsu Shuangliang, a manufacturer of air conditioners and boilers. 

Run Liang also owns a stake in Sunsea Telecommunications, a Shenzhen-listed ‘internet of things’ provider that recently raised around $200million (£1.5million) by issuing shares to Zhjzgroup, a state-backed tourism firm. Yang also sits on the board of Sunsea. 

Speculation has been mounting that Run Liang is hoping to engineer a merger of some or all of Telit with China-based Sunsea. 

Run Liang’s move on Telit, which is listed on AIM, follows a period in which several other London-listed businesses have been bought by China-linked firms. 

Imagination Technologies was bought by Canyon Bridge – a private equity fund bankrolled by Beijing – in 2017 for £550million. Concerns rose in the spring when Canyon Bridge tried to place four directors from China Reform Holdings on to Imagination’s board. 

Conservative MPs Tom Tugendhat, who now leads the China Research Group, and David Davis warned that Imagination’s intellectual property could be shifted to China. 

When asked about Telit, Bob Seely, chairman of the Foreign Affairs Select Committee, said: ‘We do need a thorough review of investment security and we need an oversight board for purchases by high risk vendors or from higher risk states.’ 

Telit, which is due to unveil figures next week, declined to comment.

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