ROME — An Italy-based defense firm that has supplied small drones to the country’s special forces was quietly and illegally purchased by Chinese state companies, Italian investigators have alleged.
On Thursday, Italian financial crimes police raided the company, which one official named as Alpi Aviation.
Alpi Aviation produces the Strix UAV at its facility in Pordenone, northern Italy. The Italian Air Force has used the UAV in Afghanistan. It weighs 10 kilograms, has a 3-meter wingspan, and can relay video and infrared imagery in real time. It takes 8 minutes to set up, and then it can be launched by catapult. It’s equipped with a parachute for landing.
Investigators said a a Hong Kong-based company in 2018 purchased a 75 percent share in the firm at an inflated price. They also allege the Hong Kong-based company was controlled by a series of corporate holdings.
Working their way through the tiers of ownership, police said they discovered the real owners of Alpi Aviaton were “two important government-owned companies in the People’s Republic of China.”
The statement said the sale violated Italy’s so-called Golden Power law, under which defense firms, as well as strategic companies in critical sectors like energy and telecommunications, can only be sold outside Italy with specific permission from the government.
Alpi Aviation was listed by Italy’s Defence Ministry as one of its suppliers, and thus it was covered by the law, said Col. Stefano Commentucci of Italy’s tax police.
A police statement said the firm failed to notify the Italian government of the 2018 change in ownership, a transaction it described as “opaque” and designed to conceal the new non-Italian ownership.
The takeover was only communicated to the Defence Ministry two years later after inquiries were made by ministry officials, the statement added.
The firm also broke Italian law on defense exports by failing to inform the government when it temporarily exported a drone for display at a 2019 Shanghai trade fair, police said. By listing the UAV as a “model aircraft,” the firm avoided limitations on exports set down by the law, the statement added.
Lawyers for the firm denied the allegations on Thursday, claiming managers at Alpi Aviation had not violated the Golden Power law, nor had the company broken rules on arms exports. The lawyers said the change of ownership was “transparent” and reflected the “real value of the company.”
Alpi Aviation undertakes joint research into military drones with Leonardo, the Italian state-controlled defense company, a police official said.
In its statement, the police said Alpi Aviation had been bought not as an investment but “exclusively for the acquisition of its technological and production know-how, including military,” with plans allegedly underway to transfer production facilities to the eastern Chinese city of Wuxi.
Tom Kington is the Italy correspondent for Defense News.