Aecon CEO critical of ‘negative campaign’ against deal with China
OTTAWA John Beck, the chief executive of Aecon Group Inc., was as confused as anyone when Michael Beat tie issued a press release last August claiming his company was “pursuing all avenues” to purchase one of Canada’s largest publicly listed construction firms.
“I had no idea who he was — I had never heard of him or his company before,” Beck said in an exclusive interview.
So it must have been even more surprising when Beattie emerged in the past few weeks as a vocal critic of a proposed $1.51 billion purchase of Aecon by the stateowned China Communications Construction Co. Ltd. (CCCC) — a deal that has been sharply opposed by domestic construction companies and some members of Parliament, and is now under national security review.
According to the federal lobbyist registry, Beattie was registered to lobby government officials, including the Prime Minister’s Office and the Innovation, Science and Economic Development Canada office that is overseeing a review of the acquisition. A lobbyist confirmed to the Financial Post Beattie did not meet with PMO officials, but did meet with officials at Investment Canada. Beattie was also quoted in a media report condemning the deal.
His meetings were part of a broader lobbying effort in Ottawa after the deal was announced in October, in which lobbyists circulated documents to media detailing some of the ethically dubious or even unlawful activities committed by CCCC in other countries. Beattie joined other critics in urging Ottawa to review the proposed deal.
“What I don’t like is the negative campaign that’s been run by people of questionable repute and their representatives,” Beck said. “I think it’s distorting and corrupting the process.”
Despite claims of being a “highly regarded” and successful business man, Beattie’s name is unknown in both construction and financial circles, according to representatives at Aecon and one financial industry insider.
One source familiar with the matter said Beattie did not approach the financial advisers, BMO Capital Markets and TD Securities, after he issued the initial press release. Nor did he request access from Aecon to the confidential corporate information that buyers typically demand.
Beattie engaged Ottawa-based lobby firms Ensign Canada and Navigator Ltd., and a financing company named Novatrek Capital GmbH based in Switzerland, to represent him in late January and early February in talks with various government officials. The two Ottawa firms have since unregistered with him.
Days after those meetings took place, Aecon issued a press release disputing Beattie’s comments, saying the company was “unable to find any evidence that Mr. Beattie is a ‘veteran construction industry executive.’ ”
Beattie’s company MBM Consulting and Construction Corp., which he claims to have established in 1995 according to an online bio, and subsidiaries MBM Consulting and MBM Investment Corp., do not appear to be registered, according to searches by the Financial Post. Beattie declined to comment.
Beck said efforts to block the deal are largely misguided, arguing that Canada’s construction industry has already been heavily invested in by massive European and U.S. construction firms. The U.S.’s Bechtel Corp., Spain’s Grupo ACS and South Korea’s Samsung are just a few conglomerates that have outbid Canadian rivals in recent years.
“I don’t understand what the campaign is about — it’s mostly been a misrepresentation of the facts,” he said.
Beattie met with officials at Investment Canada and two conservative members of Parliament, Tony Clement and Erin O’Toole, both of whom oppose the deal.
“At the core, he had the same concerns,” O’Toole said of his Jan. 31 meeting with Beattie. “He was also really trying to establish his bona fides, which was very unusual. He would talk about his family’s long history in the industry and things like that — it was very Canadiana-focused.”
Clement, for his part, said “it was a courtesy meeting,” and that he had “made up (his) mind about the Aecon transaction weeks before” he had met Beattie.
Beck said that efforts to block CCCC’s purchase of Aecon distract from the fact that Canada’s construction industry is increasingly in need of international backing as the market becomes more global.
“To be able to compete and to survive on our own soil, we need to find some way to find financial support and backing,” Beck said. “We went through a very careful and very diligent sales process, and searched for buyers around the world, and the Chinese were particularly interested.
“The industry over the past five to 10 years has been increasingly populated by large international companies, because our governments — both provincial and federal — have gone out of their way to attract them to come to Canada.”
Even so, many experts argue that Chinese foreign direct investment deserves a unique level of scrutiny. Allegations have emerged in recent years in Australia, Britain, the United States and elsewhere of increased attempts by the Chinese to influence local policy decisions, often by bribing officials. Experts say these efforts are often channelled through state-run enterprises, which act as an arm of the government.
Both the Conservative opposition and the NDP in Ottawa had called for a national security review on the deal. Some, including Conservative minister Maxime Bernier, alleged that Prime Minister Justin Trudeau’s ambition to sign a trade deal with China could cloud the final decision.
Beck said the role of what his company actually does on site, including at nuclear facilities or on telecommunications infrastructure, has been misrepresented by opponents.
“We’re a construction company. We install things, we cut and weld things, we have no intellectual property, we have no secret information,” he said. “We have no sensitive activities.”
To be able to compete and to survive on our own soil, we need to find some way to find financial support and backing.