An Aecon employee looks over Toronto’s new airport terminal check-in on Dec. 2, 2003. The federal cabinet has told Aecon Group Inc. that it will take more time to complete a national security review of the proposed takeover of the Canadian construction company by a Chinese state-owned business. (Tobin Grimshaw/The Canadian Press)

Aecon takeover by Chinese firm delayed by national security review

Share

The $1.5-billion takeover of Canadian construction company Aecon Group Inc. by a Chinese state-owned company has been pushed back, because the federal government needs more time to conduct a national security review of the sensitive deal, federal officials confirmed Monday.

The review will delay the completion of the takeover plan of Aecon by CCCC International Holding Limited (CCCI) to at least March 30, 2018, Aecon said in a press release Monday.

CCCC International, also known as CCCI, is the overseas investment and financing arm of China Communications Construction Company Ltd. (CCCC), one of the world’s largest engineering and construction groups. CCCC is 64-per-cent owned by the Chinese government.

“This is the next step in this specific case,” said in a statement a spokesperson for the office of Minister of Innovation, Science and Economic Development Navdeep Bains.

“We are following the advice provided to us by the national security agencies. ‎As repeatedly stated in the past, national security agencies are part of the review process from the beginning of all investments. They provide input at each step of the process and we listen to their advice.”

As soon as the federal government is notified by a Canadian company that there is a potential transaction involving a foreign state-owned company worth at least $373 million, it begins a 45-day net benefit review of the deal under the Investment Canada Act.

Simultaneously the government launches a national security review of the proposed takeover and can ask for more time in complex cases.

Aecon said it received notice from Bains’s office that the federal cabinet has ordered a continuation of the national security review under section 25.3 of the Investment Canada Act.

That section allows the government to order a review “for the purposes of determining whether there are reasonable grounds to believe that an investment by a non-Canadian could be injurious to national security.”

“We take this process very seriously. It is a rigorous process,” said Karl Sasseville, spokesperson for Bains.‎

“We follow the advice of those who actually have the information and intelligence necessary to make these determinations: our national security agencies. We will continue to do our diligence to review the potential national security ‎implications, as we have been doing since day one. We never have and we never will compromise on national security.”

Claims and counterclaims

Conservative MP Tony Clement asks a question during question period in the House of Commons on Parliament Hill in Ottawa on Thursday, April 13, 2017. (Sean Kilpatrick/THE CANADIAN PRESS)

Last week, the opposition Conservative Party pushed the Liberal government for a formal national security review of the takeover.

“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,” Conservative MP Tony Clement said in the House of Commons.

“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?” Clement said.

On Friday, Aecon CEO John Beck pushed back against some of the claims being made in the media and recited by experts and politicians.

While Aecon offers construction and refurbishment support to clients in the nuclear industry, the company does not own any intellectual property related to nuclear energy nor does it possess other sensitive proprietary technology, Beck said.

Aecon is also not building or involved in sensitive military installations, he said.

Beck also refuted allegations that the takeover will result in a Communist Party function being established in Canada within Aecon.

“This is incorrect,” Beck said. “The Party Committee function is a standard practice in China and will be based in Beijing. The purpose of this function is to advise the Board of CCCC on Chinese national strategic opportunities. Corporate decisions by CCCC and CCCI will continue to be made by their Board of Directors.”

The last hurdle

The acquisition of Aecon by the Chinese firm has already received the approval of Aecon shareholders, and has been cleared by a court in Ontario and Canada’s competition regulator.

Aecon said the deal only needs clearance under the Investment Canada Act and some normal closing conditions.

The 140-year-old company has worked on several Canadian landmarks including the CN Tower, Vancouver’s SkyTrain and the Halifax Shipyard.

CCCI is not without controversy. The World Bank banned it from bidding on construction projects for eight years until January 2017 due to a bid-rigging scandal in the Philippines.

The state-owned company has also been linked to the construction of artificial islands in the South China Sea, which has created high tension between China and several Asian countries.

In Bangladesh, another subsidiary of CCCC is reported to have been blocked from government contracts over allegations of offering bribes to officials.

With files from The Canadian Press and CBC News

Share
Tagged with: , , ,
Posted in Economy, International, Politics

Do you want to report an error or a typo? Click here!

@*@ Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

 characters available

Note: By submitting your comments, you acknowledge that Radio Canada International has the right to reproduce, broadcast and publicize those comments or any part thereof in any manner whatsoever. Radio Canada International does not endorse any of the views posted. Your comments will be pre-moderated and published if they meet netiquette guidelines.

Netiquette »

When you express your personal opinion in an online forum, you must be as courteous as if you were speaking with someone face-to-face. Insults and personal attacks will not be tolerated. To disagree with an opinion, an idea or an event is one thing, but to show disrespect for other people is quite another. Great minds don’t always think alike—and that’s precisely what makes online dialogue so interesting and valuable.

Netiquette is the set of rules of conduct governing how you should behave when communicating via the Internet. Before you post a message to a blog or forum, it’s important to read and understand these rules. Otherwise, you may be banned from posting.

  1. RCInet.ca’s online forums are not anonymous. Users must register, and give their full name and place of residence, which are displayed alongside each of their comments. RCInet.ca reserves the right not to publish comments if there is any doubt as to the identity of their author.
  2. Assuming the identity of another person with intent to mislead or cause harm is a serious infraction that may result in the offender being banned.
  3. RCInet.ca’s online forums are open to everyone, without regard to age, ethnic origin, religion, gender or sexual orientation.
  4. Comments that are defamatory, hateful, racist, xenophobic, sexist, or that disparage an ethnic origin, religious affiliation or age group will not be published.
  5. In online speak, writing in ALL CAPS is considered yelling, and may be interpreted as aggressive behaviour, which is unpleasant for the people reading. Any message containing one or more words in all caps (except for initialisms and acronyms) will be rejected, as will any message containing one or more words in bold, italic or underlined characters.
  6. Use of vulgar, obscene or objectionable language is prohibited. Forums are public places and your comments could offend some users. People who use inappropriate language will be banned.
  7. Mutual respect is essential among users. Insulting, threatening or harassing another user is prohibited. You can express your disagreement with an idea without attacking anyone.
  8. Exchanging arguments and opposing views is a key component of healthy debate, but it should not turn into a dialogue or private discussion between two users who address each other without regard for the other participants. Messages of this type will not be posted.
  9. Radio Canada International publishes contents in five languages. The language used in the forums has to be the same as the contents we publish. The usage of other languages, with the exception of some words, is forbidden. Messages that are off-topic will not be published.
  10. Making repetitive posts disrupts the flow of discussions and will not be tolerated.
  11. Adding images or any other type of file to comments is forbidden. Including hyperlinks to other websites is allowed, as long as they comply with netiquette. Radio Canada International  is in no way responsible for the content of such sites, however.
  12. Copying and pasting text written by someone else, even if you credit the author, is unacceptable if that text makes up the majority of your comment.
  13. Posting any type of advertising or call to action, in any form, to Radio Canada International  forums is prohibited.
  14. All comments and other types of content are moderated before publication. Radio Canada International  reserves the right to refuse any comment for publication.
  15. Radio Canada International  reserves the right to close a forum at any time, without notice.
  16. Radio Canada International  reserves the right to amend this code of conduct (netiquette) at any time, without notice.
  17. By participating in its online forums, you allow Radio Canada International to publish your comments on the web for an indefinite time. This also implies that these messages will be indexed by Internet search engines.
  18. Radio Canada International has no obligation to remove your messages from the web if one day you request it. We invite you to carefully consider your comments and the consequences of their posting.

*

One comment on “Aecon takeover by Chinese firm delayed by national security review
  1. Peter Ashcroft says:

    Work retention is a basic premiss of a country being taken over by a foreign one.