Chinese state-owned companies take over control of Italian drone maker Alpi Aviation

Rome [Italy], October 4 : Alpi Aviation srl, headquartered in Friuli-Venezia Giulia, known for producing drones, light and ultralight aviation aircraft is now in Chinese hands.
Di Valerio Fabbri, writing in Geopolitica.info said that Italy's financial crime police - Guardia di Finanza, (GdF) charged six managers of a private firm, Alpi Aviation for violations of military exports and the "golden-power" legislation.
According to recent investigations, in 2018 two Chinese state-owned companies took over control of the firm without formal disclosure to the relevant Italian authorities.
The charges filed against Alpi Aviation are fundamentally two: breach of the law that governs the export of arms and the so-called "golden-power" legislation, which was introduced in March 2012 to protect Italy's strategic companies in the defence, energy and telecommunications sectors, said Fabbri.
According to a GdF statement from earlier this month, investigations have revealed that 75 per cent of Alpi Aviation was purchased in 2018 by a foreign company named Mars Information Technology Co, based in Hong Kong. The latter had been set up ad hoc, right before the actual purchase was to take place and could not even count on independent financial resources, reported Geopolitica.info.
Denton, a global law firm, executed the takeover, the first transaction where "a Chinese holding company acquired a company in the European high-tech aviation sector", according to the CV of a senior partner of the law firm.
According to Italian investigators, the buyers of the Italian firm were two major Chinese government companies, the Chinese Corporate United Investment (CCUI) and CRRC, the world's largest supplier of rail transit equipment, reported Geopolitica.info.
Significantly, Alpi Aviation informed the ministry of Defence about the change in its corporate structure only two years after the purchase and only at the request of ministerial officials. The GdF explained that the takeover was "perfected with opaque methods aimed at preventing the traceability of the new foreign shareholder."
According to the GdF statement, the transaction was "exclusively for the acquisition of (Alpi's) technological and production know-how, including military."
That is the reason for which they allegedly planned to transfer the production facility from Italy to the technological district of Wuxi, an industrial city in Jiangsu province, less than 150 km from Shanghai, said Fabbri.
As the takeover had not been notified within the required timeframe by the company, it is no longer a matter of authorisation, but rather of initiating sanctions under Italian law. This could range from the suspension of voting rights to the invalidation of the deeds, including the actual sale of the company.
The decision to prosecute Alpi Aviation is now in the hands of the Presidency of the Italian Council of Ministers, in the form of a provision that will eventually be upheld in court.
Meanwhile, Alpi Aviation, which is also related to Italy's Ministry of Defence, remains in the hands of the government of the People's Republic of China, said Fabbri.
Italy was the first European state to endorse China's Belt and Road Initiative in 2019 when President Xi Jinping visited the country on a three-day trip.
The US had earlier warned of the Chinese threats, of the covert manner through which China has acquired defence and high-technology firms, directly impacting national security.