Aecon pushes back against criticism of sale to state-owned Chinese firm
The $1.5 billion takeover is facing a federal review. Along with construction operations, Aecon oversees sensitive nuclear reactor refurbishments, raising some concerns about the sale
CALGARY—Aecon Group Inc. says it’s concerned that false or misleading claims may taint a federal review of a $1.5-billion deal to sell the Canadian construction company to a Chinese state-owned firm.
“In order for this process to work properly, it is important that elected officials and the public have accurate information,” Aecon CEO John Beck said Feb. 9 in a statement.
The statement followed a call for a full national security review by Conservative member of Parliament Tony Clement, a former minister in the Harper government.
“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,” Clement said in the House of Commons, where MPs have Parliamentary privilege that protects them from slander and libel suits.
“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 Aecon offers construction and refurbishment support to clients in the nuclear industry but the company is not involved in sensitive military installations, nor does it own any intellectual property or sensitive proprietary technology related to nuclear energy.
His statement also responded to criticism from the Canadian Construction Association which says there are competition concerns if Aecon gets unfair access to capital through CCCC, the proposed buyer.
Beck said CCCC had received subsidies for research and development projects in China, but that the subsidiary that would buy Aecon does not receive government subsidies for its international activities.
Association chair Chris McNally said he’s not convinced by Beck’s assurance.
“Once you have a state-owned enterprise, the line between their capital and the state capital does become fuzzy,” McNally said.
Beck’s statement also tackled concerns about the influence of the Chinese Communist Party, which will have a presence in CCCC—the parent company CCCI, the entity that’s seeking to buy Aecon.
Aecon said China’s ruling party is involved to advise the CCCC board in Beijing on Chinese national strategic opportunities but there won’t be a Communist party function in Canada within Aecon.
The company also disputed an assertion by University of Ottawa professor Wesley Wark, who wrote recently that a purchase of Aecon by China Construction would be a “sort of beachhead for future investments in the West.”
Aecon said CCCI owns a similar-sized construction business in Australia and a U.S. engineering business that have complied with local and national laws “while continuing to be led by local management teams using domestic labour.”
It also denied Wark’s assertion that Aecon is “embedded” in critical military infrastructure.
But Wark said Aecon—one of Canada’s biggest construction companies—could bid on future military contracts.
“In terms of the potential concern around if you’d like nefarious activity, there are a range of them, and these are not fear mongering,” he said.
“China does engage in very aggressive global intelligence gathering targeted on the private sector and companies involved in sensitive projects, on the defence side, or critical infrastructure.”
Wark said the net benefit test in the Investment Canada Act does require some analysis of national security concerns, but that the government has the option of ordering a much more thorough review of the issues.
Navdeep Bains, the federal minister responsible for the Investment Canada Act, has said the government is following the multi-step process on national security reviews for the Aecon sale, but did not specify what level of review.