Tuesday, 29 September 2009 The murky world of the FIRBby Tom...

Tuesday, 29 September 2009
The murky world of the FIRB
by Tom Elliott


In his remarks about Lynas Corp, Patrick Colmer (CEO of the Foreign Investment Review Board) made the following points about foreign investment in Australian companies:

1. the federal government/FIRB isnt keen to see control of companies pass to consumers of its products (China Non-Ferrous investment, if successful, wouldve resulted in it owning 51.6% of Lynas);
2. with respect to smaller companies, the federal government/FIRB would prefer in any case to keep foreign ownership in general below the 50% level. Given that many offshore businesses have successfully taken over local companies in the past, some have interpreted this second remark by Colmer to be aimed at state-owned buyers   which would apply to most Chinese proposals; and
3. with respect to larger companies, a foreign ownership limit of just 15% (at which point prospective buyers used to just apply to FIRB for permission to go further) would be preferred.