The owner of British Steel, Jingye Group, is staring down a blocked dividend payout after government officials intervened to halt the transfer of funds from the struggling steelmaker. Sources confirm that the Department for Business and Trade issued a directive freezing a proposed £50 million dividend to the Chinese conglomerate, citing concerns over the company's financial stability and the security of 3,200 jobs.
Documents obtained by this newsroom reveal that Jingye attempted to extract the payment from British Steel's accounts in late February, prompting an urgent meeting between ministers and the company's directors. The government has since invoked provisions under the National Security and Investment Act to block the transfer, a rare but decisive move that underscores the fragility of the UK's steel industry.
'This is about protecting British jobs and British industry,' a senior government source told me. 'We will not allow a company to bleed a vital national asset dry for the benefit of its shareholders overseas.'
The payout, if approved, would have been the first major dividend since Jingye acquired British Steel out of liquidation in 2020 for £50 million. At the time, the deal was hailed as a lifeline for the sector, securing thousands of jobs in Scunthorpe and Teesside. But insiders now say the parent company has been quietly siphoning cash from the UK subsidiary, leaving it undercapitalised and vulnerable to global market shocks.
Jingye has denied any impropriety, claiming the dividend was a routine profit distribution and that British Steel remains adequately funded. However, leaked internal emails suggest otherwise. One senior executive wrote: 'We have been asked to delay maintenance and cut inventory to maximise cash. The parent company is treating us as a cash cow.'
The government's intervention comes amid a broader crisis in UK steelmaking. British Steel has already announced plans to close its blast furnaces at Scunthorpe and replace them with electric arc technology, a transition that will cost £1.25 billion and lead to hundreds of job losses. The company has requested state aid to fund the shift, but ministers are now demanding guarantees that Jingye will not drain the business further.
'They want public money to decarbonise, but they also want to take money out of the company,' a union official said. 'That is not a partnership. That is a heist.'
The blocked payout has sent shockwaves through the industry. Rival firms and investors are watching closely, as the case sets a precedent for government oversight of foreign-owned critical infrastructure. Legal experts say the move is legally sound but politically risky, potentially deterring future foreign investment.
A spokesperson for Jingye declined to comment on the blocked payment, but hinted at legal action. 'We have complied with all regulations and expect our contractual rights to be respected,' the statement read.
Yet the government appears unrepentant. Business Secretary Kemi Badenoch is expected to announce a new steel strategy next week, which will include tighter controls on dividend payments from strategic assets. 'We will not sacrifice the long-term health of our steel industry for short-term shareholder returns,' she told parliament yesterday.
For now, the money remains frozen. The workers at British Steel are watching, waiting, and wondering if their employer has any future beyond the next quarterly report. One thing is certain: this story is far from over.
