A controversial Chinese tycoon is trying to sell a company that stores sensitive data in London, attracting the attention of major global infrastructure investors.

Global Switch, based in Westminster and worth £8.3 billion, also has large data warehouses across Europe and serves data for corporations and governments.

Chinese steel conglomerate Jiangsu Shagang Group, led by tycoon Shen Wenzhong, who built the business, has quietly increased its stake to more than 50 percent over the past two years, giving it a controlling stake.

Kingpin: Shen Wenrong sells Global Switch, which has two main data centers in London’s Docklands (pictured)

Wenzhong, one of China’s first “red capitalists,” has become a prominent figure in the Chinese Communist Party, which rules the country amid heavy surveillance of its population.

Shagang is now looking to sell its entire 51 per cent stake in Global Switch along with the remaining Chinese investors in the business, City sources said. According to them, management meetings with interested investors began last week.

The Mail on Sunday has learned that Australian Super, one of the country’s largest superannuation funds, is considering a Global Switch.

Other interested parties include Stockholm-based EQT, one of the world’s largest private equity firms, and Florida-based DigitalBridge Group.

The revelations about the sale have raised fresh concerns about the security of Britain’s most sensitive infrastructure at a time when the government is considering Chinese investment in strategic assets.

The National Security and Investment Act, which came into force earlier this year, gives ministers expanded powers to intervene in takeovers in a number of sectors, including data centres.

Global Switch is Europe’s largest data center operator and has two major facilities in London’s Docklands, with a third under development.

They store vast amounts of highly sensitive data for banks, governments and telecommunications companies such as BT.

Grand Tory and MP David Davies told The Mail on Sunday: “In this day and age, the government must be very sensitive to any foreign ownership of major databases, particularly when they cover sensitive personal and financial data.

“This is doubly true when the shareholders are Chinese, and even more so when they are leading members of the Communist Party.

“Simple common sense dictates that the government should not allow British citizens or British companies to be subject to the surveillance that is commonplace in China.”

In 2015, the then chancellor, George Osborne, during a visit to Beijing, declared a “golden decade” of Sino-British relations.

But by 2020, under pressure from US President Donald Trump, Prime Minister Boris Johnson has announced that Chinese telecoms giant Huawei will be banned from Britain’s high-tech 5G mobile network.

MI5 Director General Ken McCallum last week warned business leaders that Beijing was determined to steal their technology to compete.

Conservative MP Bob Seeley, a member of the House of Commons foreign affairs select committee, said: “Fundamentally, we should be wary of the Chinese taking control of critical infrastructure given the number of IP [Intellectual Property] theft due to espionage and espionage’.

Global Switch insists it does not have access to any customer data and says it simply provides secure sites for firms and governments to host their computer servers.

The move to sell the group comes after the Australian government agreed to move most of its data and applications from the Global Switch data center in Sydney by July 2022 to facilities owned by other providers due to national security concerns.

Sources say Chinese owners are selling partly out of fear of losing more tenants in Europe and elsewhere as governments grow nervous about their critical infrastructure being in the hands of foreign owners. “They fear that there will be more, because European countries do not want Chinese conglomerates to own state-owned data centers,” said one of the sources. Another source insisted that the sale process is in response to “strong interest from international investors” and the high valuation of the data center assets.

One of the sources added that Global Switch scrapped plans for an initial public offering in Hong Kong in 2019 after the loss of key customers hurt business performance.

The company grew earnings before interest, tax and extraordinary charges by 6 per cent last year to £251.4m and revenues by 2 per cent to £419m.

Last month, it appointed JPMorgan, Morgan Stanley, UBS and CITIC Securities as joint financial advisers to explore strategic options.

Last night, the company declined to comment on the current sale process.

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