Australia has rejected a $300million Chinese takeover bid for a major building contractor over security fears, fanning escalating tensions between the
Australia has rejected a $300million Chinese takeover bid for a major building contractor over security fears, fanning escalating tensions between the two nations.
Treasurer Josh Frydenberg has shot down an offer made by state-owned China State Construction Engineering Corporation to acquire Australian-based company Probuild.
Probuild’s South African owners Wilson Bayly Holmes said in a statement on Monday the Australian government made the decision based on national security grounds.
‘WBHO has been advised by the potential acquirer of Probuild that it has withdrawn its proposed investment application in Probuild lodged with the Australian Foreign Investment Review Board following advice that its application would be rejected by the Federal Government on the grounds of national security,’ it said.
Treasurer Josh Frydenberg (pictured) has shot down a $300million takeover bid lodged by state-owned China State Construction Engineering Corporation to acquire a major Australian building contractor
‘WBHO remains optimistic about the fundamentals of Probuild and its prospects in the Australian market and continues to assess all potential opportunities for Probuild to maximise shareholder value and the value and potential of Probuild.’
The corporation’s links to the Chinese defence industry is the key reason the government knocked back the investment, the Australian Financial Review reports.
Fears the move would give China access to sensitive information about national infrastructure built by Probuild, including Victoria’s police headquarters’ design and vaccine laboratories, were also factors in the decision.
Mr Frydenberg wrote to both parties before Christmas expressing his intention to refuse the deal, with the corporation subsequently withdrawing the bid before it could be formally rejected.
A spokesman for Mr Frydenberg refused to comment on the correspondence.
‘The government does not comment on the application of the foreign investment screening arrangements as they apply or could apply to particular cases,’ they said.
Relations between Australia and China have soured since Prime Minister Scott Morrison last year called for an independent investigation into the origins of COVID-19. Pictured: Chinese President Xi Jinping, left, Premier Li Keqiang, second from left, and other top leaders attend a New Year gathering on December 31, 2020
Probuild executive chairman Simon Gray slammed the decision as a ‘joke’.
‘It’s more politics than it is anything else,’ Mr Gray told the publication.
‘No one can give us a real reason why we’re a national security risk. It’s a joke.’
Relations between Australia and China have deteriorated over the past year after Prime Minister Scott Morrison called for an independent investigation into the origins of COVID-19 in Wuhan.
China has since repeatedly slapped tariffs on Australian exports, including beef, barley, coal, wine, lobster, cotton, and timber.
Mr Frydenberg last year rejected China Mengniu Dairy Co’s proposed $600million bid for Lion Dairy & Drinks and the CK Group’s $13billiion bid for Australia’s east coast gas pipeline owner APA Group in 2018.
How China’s feud with Australia has escalated
2019: Australian intelligence services conclude that China was responsible for a cyber-attack on Australia’s parliament and three largest political parties in the run-up to a May election.
April 2020: Australian PM Scott Morrison begins canvassing his fellow world leaders for an inquiry into the origins of the coronavirus pandemic. Britain and France are initially reluctant but more than 100 countries eventually back an investigation.
April 15: Morrison is one of the few leaders to voice sympathy with Donald Trump’s criticisms of the World Health Organization, which the US president accuses of bias towards China.
April 21: China’s embassy accuses Australian foreign minister Peter Dutton of ‘ignorance and bigotry’ and ‘parroting what those Americans have asserted’ after he called for China to be more transparent about the outbreak.
April 23: Australia’s agriculture minister David Littleproud calls for G20 nations to campaign against the ‘wet markets’ which are common in China and linked to the earliest coronavirus cases.
April 26: Chinese ambassador Cheng Jingye hints at a boycott of Australian wine and beef and says tourists and students might avoid Australia ‘while it’s not so friendly to China’. Canberra dismisses the threat and warns Beijing against ‘economic coercion’.
May 11: China suspends beef imports from four of Australia’s largest meat processors. These account for more than a third of Australia’s $1.1billion beef exports to China.
May 18: The World Health Organization backs a partial investigation into the pandemic, but China says it is a ‘joke’ for Australia to claim credit. The same day, China imposes an 80 per cent tariff on Australian barley. Australia says it may challenge this at the WTO.
May 21: China announces new rules for iron ore imports which could allow Australian imports – usually worth $41billion per year – to be singled out for extra bureaucratic checks.
June 5: Beijing warns tourists against travelling to Australia, alleging racism and violence against the Chinese in connection with Covid-19.
June 9: China’s Ministry of Education warns students to think carefully about studying in Australia, similarly citing alleged racist incidents.
June 19: Australia says it is under cyber-attack from a foreign state which government sources say is believed to be China. The attack has been targeting industry, schools, hospitals and government officials, Morrison says.
July 9: Australia suspends extradition treaty with Hong Kong and offers to extend the visas of 10,000 Hong Kongers who are already in Australia over China’s national security law which effectively bans protest.
August 18: China launches 12-month anti-dumping investigation into wines imported from Australia in a major threat to the $6billion industry.
August 26: Prime Minster Scott Morrison announces he will legislate to stop states and territories signing deals with foreign powers that go against Australia’s foreign policy. Analysts said it is aimed at China.
October 13: Trade Minister Simon Birmingham says he’s investigating reports that Chinese customs officials have informally told state-owned steelmakers and power plants to stop Aussie coal, leaving it in ships off-shore.
November 2: Agriculture Minister David Littleproud reveals China is holding up Aussie lobster imports by checking them for minerals.
November 3: Barley, sugar, red wine, logs, coal, lobster and copper imports from Australia unofficially banned under a directive from the government, according to reports.
November 18: China releases bizarre dossier of 14 grievances with Australia.
November 27: Australian coal exports to China have dropped 96 per cent in the first three weeks of November as 82 ships laden with 8.8million tonnes of coal are left floating off Chinese ports where they have been denied entry.
November 28: Beijing imposed a 212 per cent tariff on Australia’s $1.2 billion wine exports, claiming they were being ‘dumped’ or sold at below-cost. The claim is denied by both Australia and Chinese importers.
November 30: Chinese foreign ministry spokesman Lijian Zhao posted a doctored image showing a grinning Australian soldier holding a knife to the throat of an Afghan child. The move outraged Australians .
December 12: Australian coal is added to a Chinese blacklist.