Foreign affairs committee chairman Tom Tugendhat is a shareholder in Beauhurst
A data intelligence firm partly owned by an influential Tory backbencher has won a government contract to monitor foreign takeovers of British companies, under new laws to curb Chinese and Russian influence.
Tom Tugendhat, the chairman of the foreign affairs select committee, is a shareholder in Business Funding Research Ltd, which trades as Beauhurst.
The Telegraph can reveal that the company has been awarded a £308,000 contract for corporate screening services by the Investment Security Unit (ISU), a new organisation within the Department for Business.
The ISU is the spearhead of the National Security and Investment Act, which came into force this month.
It aims to investigate foreign investment and predatory takeovers in the UK from hostile powers, notably China and Russia, amid rising official concern that cutting-edge technology and economic influence are being lost.
Mr Tugendhat’s shareholding in Beauhurst is likely to raise questions over potential conflicts between his commercial interests and work as an MP on behalf of constituents.
In his role as chairman of the foreign affairs select committee, he was a leading voice calling for more scrutiny of foreign investment in debates that led to the establishment of the ISU.
Publishing a report by the foreign affairs select committee last year on the planned legislation Mr Tugendhat warned there was a “risk of the reporting system being overwhelmed”.
He has also intervened in takeovers raising national security concerns. Before Christmas Mr Tugendhat wrote to the Business Secretary, Kwasi Kwarteng, calling for him to scrutini the £5.4bn takeover of the satellite operator Inmarsat by an American rival. Last year he also criticised the Chinese bid for a Welsh semiconductor manufacturer, Newport Wafer Fab.
Mr Tugendhat, who has been chairman of the foreign affairs committee since 2017 and declares his shareholding in Beauhurst in the Commons Register of Financial Interests, did not respond to requests for comment.
The Conservative MP for Tonbridge and Malling is the most prominent investor in Beauhurst and has held shares since before he became an MP in 2015, according to his declaration in the Commons Register of Financial Interests.
Other investors include Charlie Songhurst, former strategy officer of Microsoft, the tech entrepreneur Toby Austin, the lawyer Stephen Bence and the divorce solicitor Ayesha Vardag.
Mr Tungendhat and Business Funding Research Ltd did not respond to repeated requests for comment.
The ISU was launched two weeks ago and has new powers to investigate and intervene in investments, mergers and acquisition of assets in, or linked to, the UK that could harm national security.
The business minister, Lord Callanan, said last month: “It is an unavoidable truth that a handful of investors want to do us harm. In the UK we see ever more ingenious threats to our national security.”
Business minister Lord Callanan
The new law requires certain acquisitions of companies in the 17 most sensitive sectors of the economy to be notified and approved of by the ISU before they are completed, notably in defence, artificial intelligence, civil nuclear, computing hardware, satellite technology and energy.
It aims to prevent hostile foreign intelligence agencies from using strategic ownership of, or influence over, certain UK companies and assets to spy on, threaten and disrupt the UK economy.
But the ISU has been criticised by analysts for not specifically defining these threats to national security and that these contracts indicate “a creeping privatisation” of intelligence-gathering.
While the ISU is staffed by civil servants from the Business Department, such monitoring of foreign economic espionage in the UK has been the responsibility of MI5 and the National Crime Agency.
The primary £3.4m contract was awarded to the US due diligence company Exiger to provide services to help assess a foreign company’s national security risks. Exiger’s former regional director was Lisa Osofsky, now head of the Serious Fraud Office.
Mr Tugendhat has also been a shareholder in AccuRx Ltd, a data analytics company which aims to improve the accuracy of antibiotic prescribing, since April 2019. Since last September Mr Tugendhat has been an unpaid chairman and director of the China Research Group Ltd which considers the long-term challenges arising from China.
A government spokesman said: “Following an open and competitive tender process, Beauhurst was appointed to support our work to identify business transactions that may raise national security concerns. Ministers were not involved in the decision to award this contract.”
