Opposition defence spokesman Senator James Paterson is demanding that Defence explain its security checks after an Australian counter-drone supplier was appointed to a government panel despite reported links between its product and a company previously controlled by a Chinese entity.
Melbourne-based KeyOptions was among the first 28 companies selected for the Defence Project Land 156 Standing Offer Panel, which was established to help Defence and other agencies protect military sites, critical infrastructure and domestic operations from drone threats.
However, an investigation by The Australian has raised questions about the origins of KeyOptions’ SkyControl system, reportedly used at RAAF Base Williamtown in NSW, home to Australia’s F-35A Joint Strike Fighters.
The newspaper reported that SkyControl closely resembles SkyEye, made by Canadian company Skycope.
The specifications and marketing materials are almost identical, it said, including passive radio-frequency detection, drone and pilot geolocation, artificial intelligence and a claimed detection range of up to 35 kilometres.
According to the reporting, Chinese firm Shenzhen Shengkong Technology previously controlled Skycope, with Canadian court proceedings revealing that Skycope was Shengkong’s subsidiary.
Shengkong’s controlling shareholder is a Chinese counter-drone company, while its investors include state-owned enterprises.
The Australian said Shengkong filed Chinese patent applications in 2018 covering Skycope’s jamming technology and a broadband detection algorithm.
It also found what appeared to be a SkyEye device, matching images used in KeyOptions’ marketing, advertised on a Russian commercial website where the seller listed China as the country of origin.
While these findings do not establish that the technology is compromised, they do raise questions about its intellectual property, manufacturing, software and firmware, support arrangements and potential foreign access.
KeyOptions and Skycope both declined to answer The Australian’s questions, saying they had been directed to refer them to the ADF.
Meanwhile, the ADF would not say whether it had given that direction or identify where individual components were manufactured.
In a brief statement, it said the systems were non-integrated, stand-alone products procured under Defence’s established testing, evaluation and procurement processes and that they were designed, assembled and tested in Canada, with training and through-life support delivered in Australia.
The ADF also declined to say whether KeyOptions was required to hold Defence Industry Security Program membership or held a Defence Trade Controls permit covering supply, support and access by foreign persons in Australia.
It didn’t disclose how the product was classified under export controls or what KeyOptions declared about Skycope and Shengkong under foreign ownership, control or influence requirements.
Senator Paterson said Defence owed the public a much fuller explanation, including when it learned of the allegations, how it investigated them independently and whether it was satisfied that any risks had been mitigated.
“Perhaps there are good answers for these questions. But none have been provided so far and ‘just trust us’ doesn’t cut it when there have been so many concerning incidents of drone incursions on our bases which have gone undisclosed for so long,” he told The Australian.
Senator Paterson said Australia urgently needed effective counter-drone capability, but the technology must be fit for purpose, provide value for money and remain secure against potential adversaries.
He also called for greater support for Australia’s growing drone and counter-drone industry wherever possible.
KeyOptions won a $2 million contract for equipment and training in August 2025, followed by a $4 million contract for software and services support about two months after joining the panel.
The scrutiny follows reports of multiple unidentified drones entering restricted airspace above RAAF Base Williamtown in July, with personnel reportedly told to close blinds.
