UK to review purchase of graphene firm on security grounds

The UK government’s business secretary, Kwasi Kwarteng, has put on hold the purchase of Perpetuus Group, a UK graphene manufacturer, because of national security concerns.

Kwarteng has ordered the UK’s Competition and Markets Authority to investigate Taurus International, the would-be purchaser of Perpetuus, and any companies associated with Zhongfu Zhou, Perpetuus’s chief nanotechnology scientist, who boasts on his LinkedIn profile of strong links with academia and industry in China. Kwarteng has until Feb. 7, 2022 to decide whether to allow the acquisition.

In addition to his role at Perpetuus, Zhou is managing director of China’s Inner Mongolia Industrial Research Institute for Composite Materials. Until 2020 he was a research professor in the physics department at Aberystwyth University in Wales. He obtained his undergraduate degree and PhD in the physical chemistry of metallurgy at the University of Science & Technology Beijing.

Taurus describes itself as an engineering design firm and lists its head office as a residential property in London. It has yet to file any financial accounts since its inception in October 2020.

The UK government has directed considerable research funding into graphene, which has the potential to be used in applications including electronics and battery materials. Perpetuus produces graphene and carbon nanotubes in Wales. It has 14 employees and recorded sales of just $600,000 for the year ending in March 2020. Still, the firm produces at least a quarter of all graphene plasma made in the UK, the government says.

Perpetuus declined to comment on the investigation.

The UK is also examining national security risks associated with the proposed purchase of Newport Wafer Fab, the UK’s largest semiconductor manufacturer, by Chinese-owned Nexperia. Newport Wafer Fab has 450 employees and a plant in Newport, Wales.

In the US, meanwhile, the Committee on Foreign Investment in the United States, which reviews business deals that pose a potential threat to national security, has indicated that it is stepping up its activities under the Biden administration.