A tech boss who was sacked for whistleblowing about concerns China was trying to take over British company has won £1.5million in compensation.
Ron Black became so concerned at the potential national security risks behind moving the head office of Imagination Technologies, of which he was chief executive, that he informed British intelligence officers.
The executive, who was on a £400,000 annual salary, warned that Chinese control of the company could be ‘dangerous’ and raised concerns that the firm’s technology could be side-hustled and used for military or spying purposes.
Dr Black was sacked alongside his wife Ellen, who was also vice president of business operations at the company, after he threatened to resign over his ‘grave concerns’, the tribunal heard.
The 62-year-old successfully sued Imagination, leading to a £1.5million compensation payout in damages for unfair dismissal.
The hearing in Watford was told the company, which is based in Hertfordshire, made microchips for cars, mobile phones, gaming and military weapons.
Imagination was bought in 2017 by Canyon Bridge, a private equity fund ultimately owned by the Chinese government, in a staggering £550million deal.
Yet after losing Apple as a customer two years later, the firm endured a ‘disappointing period’, resulting in the appointment of Dr Black as a CEO – who was known in the industry as a ‘turnaround man’.
Ron Black was sacked for whistleblowing about concerns China was trying to take over British company has won £1.5million in compensation
Dr Black had previously supported an expansion into the Chinese market, which led to him arranging an ‘informal’ meeting with Lining Wang, an executive at the state-backed investment fund China Reform. The fund was said to have strong financial links to Canyon Bridge.
The tribunal heard that during the meeting Mr Wang had suggested that if Transfer were to ‘transfer its technology and redomicile to China’, Dr Black would profit financially.
Having interpreted the suggestion as a bribe, a concerned Dr Black reported the offer to the directors. This was dismissed by some of the directors, as they ‘considered that this conversation was not important as [Mr Wang] was not in a position of authority’.
No further action was taken.
This sparked Dr Black’s suspicions and from that point onwards, Dr Black ‘believed that China Reform was not merely a passive investor and that his position as CEO was subject to scrutiny by it as well as the Directors of Canyon Bridge’.
The tribunal heard China Reform suggested months later to have four directors appointed to the Imagination board, a move Dr Black opposed, as he believed control of the company ‘would be ceded to the Chinese government’.
He voiced concerns that by being under the control and ownership of the Chinese government, it would put make the company ‘a target for the US government’ as well as potentially ‘put [them] at odds with the UK Government’.
Dr Black’s concerns spearheaded his decision to arrange a meeting with a representative of GCHQ, the governmental spy agency, ‘to discuss whether the Chinese control of [Imagination] would pose a national security risk’.
The next day Dr Black sought advice from an MP, who said China Reform’s control of Imagination ‘would not go down well with the UK government.’
The executive, who was on a £400,000 annual salary, warned that Chinese control of the company Imagination Technologies could be ‘dangerous’ and raised concerns that the firm’s technology could be side-hustled and used for military or spying purposes
Concerned, Dr Black sent a letter of resignation to a boss at Canyon Bridge in which he questioned the investment fund’s choices. He added he was ‘very worried that being controlled by the Chinese government [would] be fatal for the company’.
Dr Black continued to write: ‘If Canyon Bridge and China Reform continue down the path of making Imagination a Chinese government-controlled company…[it will] trigger immediate exploitation by our competitors, and questions from our partners and customers, resulting in irreparable damage to the company’.
The tribunal concluded that Dr Black’s letter ‘explicitly said that he considered that redomiciling Imagination to China would be a breach of a director’s duties’.
It added: ‘[Dr Black] pointed out that…Chinese control of the company was not in the interests of [Imagination]. He also referred to the potential for scrutiny by the UK government as to whether there was a national security issue of the company being controlled by the Chinese government.
Dr Black took the company and the executives who run Canyon Bridge to a tribunal claiming unfair dismissal and that he had suffered detriments for making ‘protected disclosures’.
On his whistleblowing, the tribunal ruled that the passing over of ‘technical knowledge’ of Imagination’s ‘products’ to the Chinese government would have been ‘dangerous..
It added: ‘It would also allow the Chinese government to add to the product, potentially with bug software or spy software…the directors had a duty to ensure the technology was not used for nefarious purposes.’
Granting the damages award, the judge Sally Cowen said the tribunal was ‘satisfied that the making of the protected disclosures on 6 April 2020 was the principal reason for the dismissal.’
The companies have now been ordered to pay Dr Black $1.99million (£1.5million), which included compensation for unfair dismissal and for a loss of earnings.
