An emergency Commons inquiry into potential Chinese asset-stripping of UK hi-tech firms has been launched following an aborted Chinese boardroom takeover of Imagination Technologies, a Hertfordshire-based chip designer at the cutting edge of AI and communications technology.

The inquiry by the foreign affairs select committee is going ahead even though the culture secretary, Oliver Dowden, stepped in to delay the boardroom takeover due to take place at a meeting on Tuesday.

The episode highlights the growing wariness about Chinese business investment in the UK, partly in the wake of Chinese handling of the coronavirus outbreak.

The Tuesday board meeting, before it was cancelled, was due to appoint four board members with links to China Reform Holding, a $30bn Chinese government-controlled venture fund.

The chair of the foreign affairs select committee, Tom Tugendhat, wrote to the chair of Imagination Technologies, Ray Bingham, demanding to know what assurances had been given to his firm when China Reform Holding took over the company in 2017, and whether he was aware of any plans to relocate parts of the business or intellectual property overseas.

The company’s chief executive, Ron Black, appointed two years ago, tendered his resignation earlier this week and complained in a letter that China Reform’s promises to be a passive investor had not been kept.

Black put the boardroom changes explicitly in the context of the US government efforts to block Huawei’s involvement in western 5G technologies. Black and Bingham have been reinstated following the government and select committee involvement.

The firm was sold in 2017 for £550m to Canyon Bridge, a US-based venture company backed by Chinese funds, after Apple said it would no longer use its chip technology, leading to a collapse in its share price. The bid was cleared by the UK regulatory authorities and Apple signed a new deal with Imagination Technologies.

Tugendhat said it was legitimate to examine the role the Foreign Office could play in preventing Chinese asset stripping of the building blocks of the UK’s future economy, saying it had an advisory role to the UK business regulators. With parliament in recess, and no confirmation on how it will operate once the recess is over, Tugendhat indicated that the inquiry could continue as a paper-based investigation, or with online evidence-taking.

The episode also underlines the growing scepticism about China’s global role once the coronavirus crisis ends. Donald Trump suggested the US was set to withdraw funding from the UN’s World Health Organization due to excessive Chinese influence, but he later withdrew the threat in his Tuesday evening press conference.

Trump’s critics claim his America First policy has meant the US has vacated successive multilateral institutions, leaving them ripe for Chinese influence, funding and appointments of key personnel.