The fire sale of Britain’s top mobile phone technology supplier, whose owners include Roman Abramovich, has been halted by the government amid a national security investigation into the deal.
Sky News learned that officials at the Department of Business, Energy and Industrial Strategy (BEIS) issued a temporary order this week to block the purchase of Truphone assets by Hakan Koc, a billionaire businessman who Virtue.
The order comes under the new National Security and Investment Act, which means the sale to Mr Koc cannot take place until the review is complete.
Kwasi Kwarteng, the business secretary, is said to have signed the decision.
This weekend, it is unclear on what basis the order was issued, although it is believed to have been prompted by security services.
Truphone is a mobile virtual network operator in nine countries, with a focus on international corporate clients such as investment banks.
City sources say that Truphone holds an embryonic remote SIM supply contract with BT Group, which they say may have raised concerns regarding the deal.
They added that Mr. Koc had indicated that he and his fellow acquirer, Pyrros Koussios, were prepared to exclude that contract from purchasing Truphone’s assets.
The businessmen’s deal with Truphone advisers is said to have been made for £1, but is also understood to include a sizable deferral consideration based on the company’s performance.
The delay in the sale of Truphone’s assets comes during tough times for the loss-making company.
It is said to be within weeks of running out of cash, which could mean its directors have little choice but to put it into administration if the deal fails.
More than 400 people work for the company in the UK and abroad.
A sales process has been underway for Truphone in recent months, with Mr Koc selected as the preferred contractor on an exclusive basis.
One source said the issuance of the temporary order created the “bad” outcome of Truphone being able to survive for a longer time in the ownership of a sanctioned Russian oligarch.
Mr Abramovich and two Russian business partners are said to have invested more than £300 million in Truphone during their time as shareholders.
The tycoon has presided over the most famous British property sale since Vladimir Putin’s invasion of Ukraine, in the form of the £2.5 billion sale of Chelsea Football Club.
Mr Koc is a German-born businessman who co-founded used car platform Auto1.
It listed in Frankfurt last year, and although its value has fallen relative to tech stocks listed around the world, it crystallizes Mr. Koc’s position among the super-rich.
The government has been under pressure to demonstrate that the new national security laws are being applied forcefully, prompting Mr Kwarteng’s department to announce last month that they are working well – despite concerns. concerns of some of the City’s leading law firms.
“The government is focused on growing our economy and upgrading every part of the UK, but this will not come at the expense of our national security,” he said.
“This report shows our new investment screening process in action.
“It’s simple and fast, giving companies the speed and certainty to do business in a way that protects UK security.”
In total, more than 200 transactions were notified to the government in the first three-month period after the act became law, with 17 transactions called for by the authorities.
Mr Koc declined to comment on Saturday, while a government spokesman said: “While commercial transactions remain largely a matter for stakeholders, the government regularly monitors economy-wide acquisitions in the event of national security concerns”.
“The Secretary of Business has the authority under the Investment & National Security Act to intervene in acquisitions where necessary.”
A person in the city close to the proposed Truphone transaction said the decision to call it, given the potential risk to jobs, raised questions about whether the new law was properly applied.
“The government is taking the risk of throwing the baby out with bath water,” the person said.