Managers of an Italian drone business have been reported to federal prosecutors for potential links to China

Six managers of the company reportedly approved a Chinese takeover of the plant, breaching Italian arms laws.

Of the six managers, three Chinese and three Italian – have been reported to prosecutors for their role in the sale, which estimated 75% of the firm at almost €4m (£3.4m) rather than the €45,000 value of the shares at the time.

Investigators found that the Hong Kong firm that bought a stake in the drone company was actually acting as a front for two Chinese state-owned organisations.

It’s thought that the sale broke Italy’s “golden power” rules which prohibit the sale of strategic assets to foreign investors.

The drone company is subject to regular special checks because it supplies various drones and equipment to the Italian military.

Lawyers for the company however deny any breaches and say the entire deal was both transparent and lawful.