Aecon responds to fears over its $1.5B sale to Chinese company
CALGARY Construction company Aecon Group Inc. pushed back Friday against criticism of the sale of the company to a subsidiary of state-owned China Communications Construction Co.
Aecon CEO John Beck said in a release that the company is fully supportive of the federal review of the proposed sale through the Investment Canada Act, but is concerned about the false and misleading claims being made about the deal.
“In order for this process to work properly, it is important that elected officials and the public have accurate information,” said Beck in a statement.
The proposed $1.5-billion sale, which shareholders overwhelmingly approved in December, has prompted concerns over security and unfair competition.
Earlier this week, Conservative MP Tony Clement called for a full national security review of the sale in question period.
“The Chinese company poised to take over Canadian construction giant Aecon is rampant with corruption and has just been blacklisted by Bangladesh for that very reason. We know Aecon has been awarded numerous sensitive Canadian government contracts, including working with our military and in the nuclear sector.
“When Bangladesh is sounding alarm bells, why is Canada staying silent and not calling for a full national security review of the takeover of Aecon?”
Beck said in the release that the company is not involved in sensitive military installations, nor does it own any intellectual property or sensitive proprietary technology related to nuclear energy.
The deal has also come under criticism from the Canadian Construction Association over competition concerns, since Aecon would then have unfair access to capital through its 64-per-cent Chinese state-owned parent CCCC.
“They’re going to be able to be more competitive because they have access to more capital,” said Association chair Chris McNally.
Beck said CCCC had received subsidies for research and development projects in China, but that the subsidiary looking to buy Aecon does not receive government subsidies for its international activities.
McNally said he’s not convinced. “Once you have a state-owned enterprise, the line between their capital and the state capital does become fuzzy.
“My concern on the sale continues to be oneof unfair competition, which, despite what the Aecon statement says, the ability for them to get greater capital allows themto out-compete competitors.”
The sale has also raised concerns about the influence of the Chinese Community Party, which will have a presence in the parent company, but Beck said the party is involved to advise the CCCC board on Chinese national strategic opportunities.
He said the Chinese firm already owns a construction firm in Australia and an engineering business in the U.S., and that both companies continue to be led by local management as will be the case with Aecon.
Federal Minister of Innovation Navdeep Bains said in question period this week that the government is following the multi-step process on national security reviews for the Aecon sale, but did not specify how full a review is being undertaken.