The British-based chip designer at the centre of a political row over the intentions of its Chinese backers is to appoint independent board members as a safeguard against a future redomiciling of the company.

Sky News understands that Imagination Technologies has asked headhunters to identify a number of new directors with no connection to Canyon Bridge Capital Partners, its direct owner.

Sources said there were likely to be up to three new board members, who would also have no link to China Reform Holdings, the state-owned vehicle which is Canyon Bridge's main investor.

Egon Zehnder International, the search firm, is expected to oversee the recruitment process.

Image: Imagination components are used in 30% of the world's mobile phones - 11 billion devices globally

One Whitehall insider said ministers were likely to be notified of the board changes before any public announcement.


The move comes after China Reform shelved plans to nominate four new directors at an emergency board meeting earlier this month.

The meeting was called off following pressure from MPs demanding that the prime minister and culture secretary intervened to prevent the changes taking place.

Last Friday, Ray Bingham, Canyon Bridge partner and Imagination's interim chief executive, met Oliver Dowden, the culture secretary, and pledged to maintain the chip developer's status as a UK-headquartered business.

The row over Imagination's future sparked the resignations of chief executive Ron Black and two other senior executives.

One of them, Steve Evans, chief product officer, wrote in his resignation letter: "China Reform have clearly set out to take control of the business for reasons best known to themselves, and I will not be part of a company that is effectively controlled by the Chinese government."

Another of the company's former bosses, Sir Hossein Yassaie, warned the government that China Reform was using "COVID cover" in a bit to seize control of Imagination.

When details emerged of China Reform's plot to take control of Imagination, one insider said that the move appeared to have been timed at "the point of maximum distraction" for ministers dealing with the coronavirus pandemic.

Sky News revealed earlier this month that the Trump administration had also begun investigating the situation.

The intervention by Washington's Committee on Foreign Investment in the UK intervention has come two-and-a-half years after it blocked Canyon Bridge's takeover of Lattice Semiconductors in 2017.

Canyon Bridge retains offices in the US but redomiciled to the Cayman Islands after CFIUS's intervention in the Lattice deal.

Imagination's relationship with Apple, which was rekindled in January with a new licensing deal, is expected to be a focal point of CFIUS's enquiries.

The British company's sale to Canyon Bridge was approved by the US government subject to its disposal of MIPS, a graphics processing unit operating in the US.

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MIPS was sold to Tallwood Venture Capital, a California-based investor, which subsequently combined it with Wave, an artificial intelligence processing business.

Imagination boasts that its graphics processing units (GPUs) are used in 30% of the world's mobile phones and, in total, 11 billion devices globally.

It was the tenth most prolific UK-based filer of patents in the European Union last year - ahead of Dyson and the chip designer ARM Holdings, which is owned by Japan's SoftBank.

The Foreign Affairs Select Committee has launched a separate inquiry into "foreign asset-stripping of UK companies", which comes in the wake of the government's decision to give Huawei, the Chinese telecoms equipment manufacturer, a role in the construction of Britain's 5G network.

Imagination declined to comment on future board changes.