Federal Treasurer Scott Morrison has blocked sale of the Kidman cattle property on national interest grounds based on advice from the Foreign Investment Review Board.
S. Kidman & Co has a herd of 200,000 cattle in Australia, spanning 101,411 square kilometres and spread across 11 cattle stations in South Australia, Western Australia, the Northern Territory and Queensland. Kidman's holdings include Australia's largest cattle station, Anna Creek, located near the Woomera weapons testing range in outback South Australia.
According to reports Chinese investment firm Genius Link Asset Management was the highest bidder after rival company Shanghai Pengxin made a $350 million bid.
"Given the size and significance of the total portfolio of Kidman properties along with the national security issues around access to the WPA, I have determined, after taking advice from FIRB, that it would be contrary to Australia's national interest for a foreign person to acquire S. Kidman and Co. in its current form," Mr Morrison said.
Back in 2009, then Treasurer Wayne Swan blocked Chinese state-owned firm Minmetals from buying parts of Oz Minerals because the company's Prominent Hill mine was in the so-called "red area" around the Woomera Prohibited Area.
Prime Minister Malcolm Turnbull has rejected suggestions that there could be a backlash from China following the decision to block the sale to foreign investors of the huge Kidman cattle property.
The Prime Minister said the Chinese were not the only ones interested in the sale and the property could still be sold so long as the sale was restructured.
- The FIRB operates within the Federal Treasury and is supported by Treasury staff, examines proposals by foreign interests to undertake direct investment in Australia and makes recommendations to the Government on whether to approve them.
- The FIRB's functions are advisory only. Responsibility for the Government's foreign investment policy and for making decisions on proposals rests with the Treasurer.
The Australian Government's approach to reviewing foreign investment proposals is a case-by-case basis with national interest considerations given to a broad range of factors rather than 'hard and fast rules'. The 'national interest' factors that the Government typically considers when assessing foreign investment proposals are:
- national security – the extent to which foreign investments affect Australia's ability to protect its strategic and security interests;
- competition – in addition to examination by the Australian Competition and Consumer Commission, FIRB will examine the effect that foreign investment will have on the diversity of ownership within Australian industries and sectors to promote healthy competition;
- impact on the economy and the community – the impact on the general economy, including the following: plans to restructure the target entity, the nature of investment funding arrangements, the level of Australian participation in the target entity following the transaction and obtaining a fair return for the Australian people; and
- character of the foreign investor – the extent to which the foreign investor operates on a transparent commercial basis and is subject to adequate and transparent regulation and supervision. This also includes special considerations in relation to foreign governments and their related entities.
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