Potential bidders are circling UK tech company Telit Communications, with private equity buyers weighing up making offers for a large part of the business as a mystery Chinese investor continues to build a stake.

Adviser Rothschild is gauging interest from funds for the automotive division of Telit, which specialises in chips supporting “internet of things” networks. It has been hit by a scandal over the true identity of its founder Oozi Cats, who quit as chief executive in August.

The automotive division, which supplies companies including Tesla, has had a price tag of between £100m and £150m placed on it, according to two people briefed on the situation. Another person said it was early in the process, with no deal imminent.

However, a collapse in the share price on the back of the Cats scandal has opened the door to a bid for the full company. The stock has halved since July, meaning Telit as a whole now has a market value of just £205m.

Private equity companies including Berkshire Partners, Vector Capital, Apax, Advent and Battery Ventures have been linked to the process, but no bids have been lodged. Some trade buyers have also been sounded out. Sierra Wireless was seen as a potential buyer of Telit’s automotive division, but it paid $107m for Numerex Corp in August to boost its own ‘internet of things’ business.

The potential bidders did not respond to requests for comment.

Telit declined to comment but has said that it was “actively” considering the future of some product lines following its profit warning. The company is cutting operational and research and development costs, after pledging to generate cash in the second half of the year.

Chinese investor Run Liang Tai Management has been building a stake in Telit since the departure of Mr Cats and is now the largest shareholder with a more than 14 per cent stake. The Hong Kong-based fund was incorporated in August last year but little is known about the identity of the investors behind the vehicle, which has also taken a stake in Baidu video service iQiyi.

Telit has moved to draw a line under criticism of its accounting polices by appointing Grant Thornton’s Israeli office to run a separate independent audit alongside EY’s existing work. It has also announced new contracts with Intel subsidiary Wind River and Husqvarna, the maker of Flymo lawnmowers.

A full offer for Telit by the backers of Run Liang Tai would represent the third UK-listed technology company to be taken out by Chinese buyers in recent times. Canyon Bridge, the China-backed fund, agreed to pay £550m for Hertfordshire-based chip designer Imagination Technologies last month while Hytera bought out Cambridge rival Sepura, the maker of walkie talkies used by the emergency services, for £74m in May.

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