New China fears over grip on UK data firm Global Switch as 5g security rows continue
A Chinese tycoon who has bought a controlling stake in a UK company that stores sensitive data on British businesses and customers is a high-ranking Communist Party member, The Mail on Sunday can reveal.
London-based data centre giant Global Switch is now 49.9 per cent owned by Shagang – a private Chinese steel company controlled by businessman Shen Wenrong.
As chairman and founder, he has been lauded as an ‘outstanding Communist Party member’. He co-owns another steel giant with the Chinese state and has been a representative at two of the Communist Party’s key national congress events.
His son Shen Qian now sits on the board of Global Switch.
Concerns about Huawei founder Ren Zhengfei’s links to the Communist Party in China have made security experts sensitive about Chinese companies having a role in Britain’s 5g network
The startling revelations will raise fresh fears about the security of Britain’s most sensitive data in the wake of the row over Huawei – the Chinese company which has been given the go-ahead to build Britain’s 5G mobile network.
Prime Minister Boris Johnson has been under pressure to call for the removal of Huawei-made equipment from Britain’s 5G network since Tory MPs rebelled in a vote last week.
Concerns stem from Huawei founder Ren Zhengfei’s links to the Communist Party in China and there are fears that the Chinese state may be able to access highly sensitive data passed through the network.
Global Switch is Europe’s largest data centre operator and has two major facilities in London’s Canary Wharf. These store vast amounts of highly sensitive data for banks, governments and companies such as BT.
This could potentially include British state secrets and the personal details of millions of customers of banks and telecoms companies.
Global Switch insists it has ‘no access to any customer data’ and claims it merely provides secure sites where companies and governments can locate their own computer servers. A company spokesman said: ‘These cannot be accessed by Global Switch, nor its investors.’
However, the Australian defence department has already moved files out of Global Switch’s Sydney site because of its Chinese ownership.
Last night, politicians and experts in this country expressed fears that Britain has been far too relaxed about Global Switch.
Conservative MP Bob Seely said: ‘Do we mind where our personal information goes? Do we mind who controls that information?
These are questions we don’t seem to be asking. I think we’re making a mess of things.’
He added: ‘China’s move into the digital space is part of a long-term ambition to dominate global advanced technology – especially in communications. We need a good relationship with China but not at any price.’
One senior data centre executive last night hit back at the claim that governments are unable to access data held in the type of sites owned by Global Switch.
The source said he had personal experience of having been asked by governments for access in certain situations. He added: ‘There are some real concerns now that Global Switch is owned by the Chinese. They are storing critical data.’
A consortium of Chinese investors took a 51 per cent stake in Global Switch in 2018.
Then last August, Shagang, one of the group of investors (and also known as Jiangsu Shagang and ShaSteel), paid £1.8billion for a 24 per cent stake in Global Switch, valuing it at £7.5billion.
Crucially, that deal took Shagang’s stake alone to 49.9 per cent making it the ultimate controlling party, according to Companies House. The rest is held by other Chinese investors.
Shen has installed two other Shagang representatives to Global Switch’s board alongside his son, who is not a member of the Communist Party.
Shen, 74, founded Shagang in 1975 and is still the largest shareholder with a 29 per cent stake.
His LinkedIn page says he is president and secretary of the Party Committee at Shagang.
Global Switch denies there are any security risks. A spokesman said: ‘Global Switch has no access to any customer data. It doesn’t provide any IT services to its customers. It simply builds and operates high quality, technical real estate.’
The spokesman said Global Switch meets the standards required to protect UK Government data.