Angelo Amante & Giuseppe Fonte

ROME, (Reuters) – Italy thinks it should have asked for approval to purchase a Chinese company selling military drones. If it does not get a satisfactory explanation it could endanger the deal, according to three sources.

Rome launched an investigation in August regarding the sale of a 75% share in Alpi Aviation, a northern Italian company, in order to determine if it had been notified under the so-called “golden power” regulations that apply to strategically important assets.

This deal demonstrated how simple it was to hide changes in corporate ownership at a moment when there is increasing pressure in Europe and the United States to watch for potential threats to national security from Chinese investors.

China Corporate United Investment Holding was involved in the purchase through a number of investment vehicles. CRRC Capital Holding is controlled by Wuxi Liyuan Economic Development Zone’s Management Committee.

These entities did not respond to a request for comment outside of normal business hours. The office of Mario Draghi, the Italian Prime Minister, declined to comment.

Alpi Aviation did not respond immediately. The lawyers of Alpi Aviation have stated previously that they were compliant with the rules regarding the sale.

Following an extensive analysis of the facts, the government has prepared a formal notice that will be sent out to all parties, asking for clarifications.

One of the Italian officials added that they are giving “full attention” to this matter.

It was revealed that six individuals were being investigated by Italian tax authorities after they opened an investigation into the matter.

The deal was described by police as a “clearly” predatory technology investment.

Fourth source claims that the Chinese investor paid close to 6 million Euros ($6.8 Million) for 75% of the stake.

Rome might impose sanctions that, in severe cases, could result in the sale’s invalidation.

To protect strategic assets against non-European Union or – temporarily until Dec 31 – EU group takeovers, the government is granted special anti-takeover powers.

Since 2012, Italy has used its four golden powers to stop foreign interest in Italy. These three were able to stop Chinese bids and the other two are from Drgahi’s nine-months-old government.

Last month, Draghi opposed the sale to Chinese-owned Syngenta of a vegetable seed manufacturer. In April, Shenzhen Invenland Holdings Co. Ltd. was prevented from purchasing a controlling share in a semiconductor manufacturing company.

($1 = 0.8797 euros)