The UK government has ordered the Russian oligarch-backed investment company LetterOne to sell regional broadband provider Upp, saying its current ownership was a national security risk.
The business secretary, Grant Shapps, said the risk to national security relates to “the ownership of Upp … and Upp’s expanding full fiber broadband network”.
LetterOne or L1, whose owners include the oligarchs Mikhail Fridman and Petr Aven, said it was disappointed by the British government’s decision to order it to sell 100% of Upp within a specified period and by following a specified process.
“We believe that L1 ownership of Upp is not a threat to national security in any way,” said L1, which bought Upp, previously known as Fiber Me Ltd, in 2021.
“L1 is not sanctioned and has taken fast, decisive action to put in place strong measures to distance L1 from its sanctioned shareholders. They have no role in L1, no access to premises, infrastructure, people and funds or benefits of any description,” she said in a statement.
Earlier this year, the British government used the National Security and Investment Act, which came into force in January, to order the Chinese-owned technology firm Nexperia to sell at least 86% of Britain’s biggest microchip factory, Newport Wafer Fab.
The act allows the government to scrutinize and potentially block acquisitions and investments in sensitive sectors.
Shapps said Upp must complete a security audit of its network prior to its sale.
L1 noted that it had gained government endorsement for Upp in 2021, when its investment was welcomed.
The UK, along with western allies, has been imposing sanctions against Russian individuals, banks and strategic industries since Russia’s invasion of Ukraine in late February.