if Tesserent is "a critical national security business"......surely it is worth more than 13c a share.
The Greens have urged the Foreign Investment Review Board Board to reject the takeover of Australia’s largest ASX-listed cybersecurity company by French-owned defence giant Thales, warning the $176m deal would undermine national security.
Greens defence and digital rights spokesman David Shoebridge wrote to the FIRB late last week calling for Melbourne-founded Tesserent to be considered a critical national security business that should be kept in Australians hands.
“The purchase of Australia’s biggest cybersecurity firm, a firm that is critical infrastructure and a national security business, by a foreign multinational company, is deeply troubling and poses serious national security concerns,” Senator Shoebridge told the FIRB.
Tesserent has more than 1200 clients from mid-sized companies to “government and critical infrastructure” organisations.
The company, whichbacks the acquisition deal, played down sovereignty concerns in comments to The Australian last week, arguing the majority of cybersecurity providers, together with the ‘big four’ consulting firms, were multinationals.
But Senator Shoebridge pointed to the FIRB’s guidance on national security, which warns: “The access and control afforded by foreign investment in the IT, data and cloud sector may create opportunities for foreign actors to harm national security.”
Takeovers of critical infrastructure companies are automatically reviewed by the FIRB, regardless of the value of the transaction.
Thales has had a three decade presence in Australia, employing 3800 people across 35 sites, with a supply chain spanning 1500 Australian small and medium enterprises.
It manufactures the Australian Army’s iconic Bushmaster protected vehicles and new Hawkei tactical four-wheel-drives, and is a likely partner in the nation’s new guided weapons enterprise.
A Thales spokeswoman said the company would work through the FIRB process, as it had when the company acquired former commonwealth defence contractor ADI Limited in 2006.
“We are committed to our security obligations and implement essential policies, procedures and practices to assure we operate in Australia’s national interests, and that of our customers, partners and other stakeholders,” the spokeswoman said.
Senator Shoebridge said the Greens’ concerns over the agreement were exacerbated by “easily googleable” corruption claims against the company overseas.
They include unresolved allegations in South Africa, where the country’s former president Jacob Zuma is facing charges for allegedly accepting bribes from Thales from 1999 to protect the company from investigation over a $1bn military equipment deal.
Thales is also under formal investigation over the 2002 sale of submarines to Malaysia, while one of its subsidiaries is under investigation in France over allegations it bribes officials in several African countries to purchase biometric identification systems.
In 2011, Thales was ordered to pay €630 million in fines after the Taiwanese courts found the company had paid bribes in the 1991 sale of frigates to Taiwan.
The Thales spokeswoman said: “Thales and its affiliates act in strict compliance with national and international regulations and has a zero-tolerance policy with respect to corruption and influence peddling.
“Our ethics and integrity program is regularly evaluated and amended to reflect current legislation, norms and standards.”
Strategic Analysis Australia director Peter Jennings told The Australian that the federal government needed to “put rules around the purchase” of Tesserent, ensuring the Thales-owned enterprise stored Australian data onshore, used security-vetted personnel, and maintained an Australian board.
He said he believed the national security aspects of the deal could be “managed competently enough”, arguing European countries were increasingly on the same page as Australia and its Five Eyes partners when it came to dealing with Chinese security threats.
“Australia needs to be working with trusted partners on cybersecurity. There is no such thing as autonomy in a world connected by the ‘internet of things’,” Mr Jennings said.
FOREIGN AFFAIRS AND DEFENCE CORRESPONDENT
Ben Packham is The Australian's foreign affairs and defence correspondent. To contact him securely use the Signal App. See his Twitter bio for details....
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