China reportedly took control of an Italian military drone maker quietly
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On January 1, 2021, soldiers from the People’s Liberation Army Honor Guard perform the flag-raising ceremony in Tiananmen Square. This is Beijing, China.
Visual China Group | Getty Images
Two Chinese state firms took control of an Italian military drone maker more than three years ago via an offshore company — without the knowledge of authorities in Italy and Europe, the Wall Street Journal reported Monday.
According to the Journal, Mars (HK Information Technology) purchased a 75% share in Alpi Aviation, an Italian drone manufacturer, for 4,000,000 euros or $4.6 Million. Mars also invested another 1.5 million euros in Alpi — an amount Italian police said was a significant overpayment, according to the report.
The report stated that Mars began the process to transfer Alpi’s intellectual property and technical knowledge to a new China production site.
The report states that Italian authorities are looking into the 2018 deal. This includes whether Alpi should’ve notified the Italian government about the stake sale. It also examines whether Alpi transferred technology to China.
The Journal reported that police concluded Mars was a shell firm linked to two Chinese-controlled companies.
According to the report, Mars was only two months old when Hong Kong registered it. It added that police traced Mars’ ownership of Alpi to China Railway Rolling Stock Corp or CRRC — a large Chinese state-owned rail company — and an investment group controlled by the Wuxi municipal government.
Wuxi, a Chinese city located near Shanghai is known as. A Reuters September Report identified the investment group as China Corporate United Investment Holding.
According to the report, Alpi supplied drones for the Italian Air Force’s use in Afghanistan.
CNBC did not reach Alpi or CRRC for comment as of publication. Mars and Wuxi could not reach CNBC for comment.
The Journal, using a quote from Alpi stated that the Italian drone maker had denied breaking laws concerning the export of technology and strategic information to Italy. The company claimed that its sale of stakes was transparent, and it had been done at real value.
The Journal reports that European companies generally have to notify authorities about foreign takeovers, especially if the transactions involve security.
The report stated that the Italian government can veto any takeovers from non-EU buyers of strategic sectors such as communications or defense.
For more on the investigation into Alpi Aviation, read the full story on the Wall Street Journal.
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