Aecon raises red flag about opponent of its sale to Chinese state-owned firm

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Major construction player Aecon Group is firing back at criticism of a proposed deal to sell the company to a state-owned Chinese firm and is questioning the credibility of one of the opponents of the $1.5-billion takeover.

China Communications Construction Co. Ltd. is seeking the Canadian government's approval to buy Aecon. The Beijing-based firm is 63-per-cent owned by the Chinese state.

The Canadian company raised questions on Friday about Michael Beattie, who says he owns a construction company and criticized the Aecon takeover in a Globe and Mail story last week. Mr. Beattie and his lawyer, Grant McGlaughlin from Goodmans in Toronto, recently met with Conservative MPs and Investment Canada, the division of the Department of Innovation that reviews foreign takeovers.

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Four lobbyists over the past two months registered in Ottawa on behalf of Mr. Beattie's MBM Investment Corp. to make representations to the federal government on investment, trade and China.

"Michael Beattie claims to be a major construction company executive and his statements opposing the transaction have been widely reported," Aecon said in a statement on Friday. "We have been unable to find any evidence that Mr. Beattie is a 'veteran construction industry executive.' "

Aecon alleged that Mr. Beattie's company is "not a registered business" and neither he nor MBM is a member of any Canadian construction association. "He has also taken credit for a number of construction projects for which we can find no evidence of his participation," Aecon said.

Through Mr. McGlaughlin, Mr. Beattie said the legal name for his company is MBM Investment Corp. and it is registered in Ontario. The Globe could not find a company registered by that name in Ontario. Mr. Beattie has said the company's operating name is MBM Consulting and Construction Corp.

Other claims Mr. Beattie has made about himself raise further questions. His LinkedIn profile says he is a "graduate of McGill University" and holds a degree in mechanical engineering and business commerce. A profile on the business database Crunchbase says he earned this degree in 1989. McGill University said on Friday it had no record of a student named Michael Beattie graduating from its engineering or business programs in the 1980s. Mr. Beattie's LinkedIn profile said he had an executive MBA from the University of Western Ontario, but his lawyer told The Globe his client did not complete the degree.

Mr. Beattie said through Mr. McGlaughlin that his company has more than 145 full-time employees and owns five subsidiaries, which belong to construction associations. He later declined to identify these subsidiaries or produce a detailed list of significant projects his firm has worked on.

Mr. Beattie would not discuss his construction business affairs and did not return phone calls from The Globe. "I am not prepared to fully compromise my personal privacy and my privately-owned businesses," he said in a statement on Friday.

He said in the statement he opposes the Aecon takeover because of concerns about giving ownership of Canada's third-largest construction company to a large Chinese state-owned enterprise.

"From the outset, I was motivated by concern as an individual – and as an investor in the Canadian construction industry – about the long-term impact of the deal," he said.

Mr. McGlaughlin did not respond to requests from The Globe on Friday to explain the discrepancies in Mr. Beattie's record.

Federal records show the lobbyists for MBM are registered to discuss China with policy makers at Global Affairs, the innovation department, and the Prime Minister's Office. The lobbyists include former CBC broadcaster Don Newman and Andrew Balfour at Ensight, Andrew Galloro from Navigator, and Joseph Belan, a Swiss-based businessman.

A source said Mr. Beattie has met with federal regulators at Investment Canada, which is reviewing the takeover.

Mr. Beattie was introduced to The Globe by Navigator.

In Ottawa last week, Mr. Beattie met with Conservative MPs Erin O'Toole and Tony Clement to discuss the Aecon takeover. Mr. Clement, who is concerned about the national security implications, later said the meeting had no impact on his views.

Mr. O'Toole said his meeting with Mr. Beattie included his lawyer, Mr. Newman of Ensight and others. He said Mr. Beattie raised concerns about how other Canadian companies could compete with Aecon after the takeover.

Aecon, led by CEO John Beck, issued a statement on Friday that sought to allay concerns about its involvement in critical infrastructure projects, such as nuclear facilities, that would pass to China Communications Construction Co. (CCCC) if Ottawa approves the transaction. The federal government is conducting a "net benefit" analysis to determine if the deal is in Canada's interest.

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

It also disputed University of Ottawa security expert Wesley Wark's comments that Aecon is "deeply embedded in both military and civilian critical infrastructure." The company said: "Aecon is not building or involved in sensitive military installations."

The construction firm rejected the notion that Aecon would receive subsidies from Beijing, as CCCC does. The Canadian Construction Association has said it's worried that Aecon could undercut domestic rivals as part of the CCCC family.

Aecon said any subsidies CCCC receives "are related to specific research and development projects in China" that are available to any company involved. The subsidiary of CCCC that would own Aecon, the company said, "does not receive government subsidies for its international activities," the company said.