A man who claimed he was a construction industry executive lobbied Ottawa to block China's proposed $1.5-billion takeover of Aecon Group Inc., Canada's largest publicly-traded construction company.
The Trudeau government is still screening the bid to acquire Toronto-based Aecon by Chinese state-controlled construction giant China Communications Construction Co. (CCCC), which is 63-per-cent owned by Beijing.
Michael Beattie, who purported to be a construction executive met with The Globe and Mail as part of his lobbying efforts against the Aecon deal. Mr. Beattie was represented by a Toronto legal firm and two well-known lobbying firms. In fact, court documents later showed that Mr. Beattie does not appear to own any construction businesses and has a record of run-ins with the law including convictions for fraud and perjury and new charges for fraud. Mr. Beattie did not return e-mails or phone calls from The Globe seeking his response.
As part of his lobbying campaign, he told The Globe and Mail that he feels many in Canada's construction industry oppose the sale on national-security grounds, pointing to Aecon's widespread involvement in critical infrastructure projects across the country from nuclear energy to pipelines, transit and hydro-hydroelectric projects such as the massive Site C project in British Columbia.
"I can't say it enough. This is a bad deal for Canada," Mr. Beattie said in an interview on Wednesday. "This is a destructive and destabilizing transaction for the Canadian industry."
In mid-January, a delegation from PCL Constructors Inc., Ledcor Group and P.W. Graham & Sons Construction met top senior servants in Ottawa to press their case that CCCC has a poor track record on corruption, safety, quality of work and national security. "Aecon is the jewel of the Canadian construction market," Mr. Beattie said. "Having a bad player like China Communications Construction come in and take Canada's jewel would be wrong."
Mr. Beattie said his fear is that CCCC is a tool of the Communist Party and would give the one-party state 100 per cent control of a Canadian company and access to the data and building plans for important critical infrastructure projects in this country. CCCC recently notified shareholders it will establish a Communist Party of China cell inside its corporate ranks in keeping with a directive from Beijing.
The Chinese government last week was accused of bugging the headquarters of the African Union that Beijing's state-owned construction firm – China State Construction Engineering Corp. – built in Ethiopia in 2012. China has rejected allegations but this controversy underscores the risk of allowing Chinese controlled firms access to critical infrastructure, Mr. Beattie said. "Let's be straight. They have no accountability because they are tools of the Communist Party," he said.
Construction firms aren't the only players opposing the Aecon takeover. Montreal investor Stephen Jarislowsky has spoken out against the deal, telling BNN in an interview on Wednesday that China shouldn't be managing Canadian assets because of its international track record.
Mr. Beattie warned that an Aecon financed by CCCC will damage the Canadian construction industry by under-bidding other players because it has access to government subsidies from Beijing. State-owned firms enjoy support ranging from favourable tax treatment to grants and preferential access to raw materials, according to the U.S.-China Economic and Security Review Commission.
John Beck, CEO of Aecon Group, dismissed Mr. Beattie's criticism.
"Throughout this process, we have had and seen numerous communications from Mr. Beattie and find his comments are neither informed nor factual."
Mr. Beck also noted that three of Aecon's unions publicly back the deal including the Labourers' International Union of North America (LiUNA), the company's largest union; the International Union of Operating Engineers (IUOE); and the Building Trades Union.
CCCC's 2017 first-quarter report filed with the Hong Kong Stock Exchange discusses government support. In explaining why non-operating income more than doubled to $38-million in this period, it cites "government subsidies" as the main cause.
National security agencies in Canada and the United States have warned that companies owned or partly owned by the Chinese government are not merely commercial operations; they are also prone to passing on information or technology to Beijing and making business decisions that could conflict with Canadian interests but serve the agenda of the Communist Party.
Representatives for CCCC were not immediately available for comment.