Chinese genetics group defends US bid A Chinese genetic research company is defending its bid for an American company after a US rival of the group said the potential deal would give too much sensitive information to China and could raise national security concerns. The fight over Mountain View-based Complete Genomics, a life sciences company that sequences the human genome, will test the Obama administration's appetite for cross-border deals with China in a high-tech and sensitive field that could be key to medical and scientific breakthroughs of the future. The case raises new questions over how the US judges the independence of Chinese companies whose funding is linked to the Chinese government, and whether the concern the Obama administration has shown in the past for cross-border deals involving communications technology also applies to medical and scientific fields. If the transaction is cleared, it will represent an opportunity for BGI-Shenzhen, China's leading genetic research company, to make significant inroads into the US market. The committee that vets foreign takeovers of sensitive US assets, known as Cfius, is conducting a national security investigation into BGI's $118m bid for Complete Genomics, which is expected to conclude by the end of the year. But the deal faces a challenge from Illumina, a San Diego-based company that has made an offer that is 5 per cent higher. But a combination between the two US companies faces its own potential hurdles, with BGI arguing that the deal would not be passed by antitrust authorities. In a letter to Complete Genomics" board last week, Illumina said a takeover of the company by BGI represented a "material risk" for shareholders because it raised "national security, industrial policy, personal identifier information protection and other concerns." It said BGI was a "foreign state owned entity" and raised the Obama administration's recent decision to unwind a deal involving a Chinese company and four wind farms as evidence that the genome deal would fail to win approval. "Recently the president issued an order to unwind such a transaction in an industry far less sensitive than ours," said Jay Flatley, president and chief executive of Illumina. But in a response to the letter to Complete Genomics board, BGI objected to Illumina's characterisation of its ownership. "These assertions are not true, and Illumina, which has done business with BGI for many years, knows it," the letter from BGI said. The company says it is a non-profit genomic research institute and that its equity is owned by BGI employees, who are private citizens. BGI was founded by Danish-trained Chinese geneticist Yang Huanming in 1999. The company does genetic sequencing for organisms such as rice and silkworms, as well as research for global companies such as Merck and Pfizer, with whom BGI recently completed a cancer-related research project. A spokesman for BGI said that the company was "fully privately owned." Chinese government records show the company is not a centrally controlled state-owned enterprise. BGI has co-operated in the past with the Chinese Academy of Sciences, which is state-funded, but is not linked to CAS today, according to the spokesman. About 10 years ago BGI received investment funding from the municipal government of Hangzhou, a city in eastern China in which BGI subsequently set up a research facility. BGI did not respond to a request from the Financial Times to disclose all of its funding sources. In 2009, BGI received a credit line of $1.5bn from the China Development Bank, which is state-owned like all large Chinese banks, to help finance the purchase of sequencing machines from Illumina. At the time the purchase was Illumina's biggest sale, according to a statement on Illumina's website.