Italy probes sale of military drones group to Chinese investors

The Italian government of Mario Draghi has opened an inquiry into the sale of a company making high-tech drones for the armed forces to Chinese state-owned investors three years ago, a source close to the matter said.

Rome wants to verify whether the sale of a 75 per cent holding in Alpi Aviation, based in northern Italy, had to be notified to the government under the so-called golden power regulation, the source said on Friday, asking not to be named.

Lawyers for Alpi Aviation said the company had complied with all rules in the sale.

Rome has special vetting powers to block unwanted bids from non-EU suitors in industries deemed of strategic importance like defence, energy and telecoms.

This latest development shows how easy it is for changes in corporate ownership to go under the radar at a time when pressure is rising in the United States and Europe to monitor potential risks to national security from Chinese investors.

The government may impose penalties or in the most serious case invalidate the sale, the source said.

On Thursday the Italian finance police said six people were under investigation in a case for allegedly breaching rules on the sale of military material as well as golden powers.

The police, which did not name the company involved, said a 75 per cent stake had been bought through an offshore company by  "two important Chinese state-owned companies."