The UK has appointed a government observer to the Board of one of the entities to be acquired by Sichuan Development Holding Co., Ltd as a provision in the government's final order consenting to the transaction under the National Security and Investment Act 2021.
The ability for a government to appoint an observer to the Board of the target business is likely to be a material negative factor in a potential purchaser's decision to pursue its interest in a transaction. Market reaction to this might be that it becomes common practice to have an express condition in the sale and purchase agreement (SPA) that completion will not occur if there is such a provision in the final order.
There is almost no limit to the power under the Act to impose provisions in a final order. There is no definition in the Act as to what national security means.
See the following for an article on the first eight months of operation of the Act. https://core.lexxion.eu/article/CORE/2022/3/14
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