Aussie media mogul savages SingTel bid again
- 20 July, 2001 10:10
Australian media executive Kerry Stokes has launched a second scathing attack on the proposed $US8 billion takeover by Singapore Telecommunications (SingTel) of local carrier Cable & Wireless Optus (CWO).
In a lengthy submission to Australia's Foreign Investment Review Board (FIRB), Stokes said that control of Optus by the government-owned SingTel threatened both the security and the commercial interests of Australia. This is the second submission made by Stokes, who owns Australia's Channel 7 TV network, to FIRB relating to the takeover. The decision whether to allow the friendly takeover to go ahead lies with FIRB and its head, Australian treasurer (finance minister) Peter Costello.
In the submission, Stokes made several assertions. First, that the Singapore government uses SingTel as an instrument of control in its home market and could potentially extend that attitude to Australia if it gained control of CWO.
"Such government strategies and attitudes directly conflict with Australian values relating to freedom from surveillance and the right to privacy, as evidenced by recent Australian privacy law amendments to strengthen protection for individuals under privacy legislation," the submission said.
Second, any attempts to impose Australian law on SingTel's running of Optus could be difficult, Stokes said.
"Although Optus as an entity will continue to be subject to Australian law at a theoretical level, practical difficulties may arise in attempting to enforce Australian law against, in effect, a foreign government," he said in the submission. "In sensitive areas such as privacy and freedom of speech, international relations issues may intrude into the process, making enforcement of our law problematic."
SingTel dismissed Stokes's claim that it would allow Optus to engage in any activities which contravened Australian law.
"SingTel complies with the laws and regulations of government agencies and authorities in all the markets it operates in," SingTel said in a written response. "We will ensure that Optus continues to comply with the laws and regulations of Australia if under SingTel ownership."
Stokes also said there are grave concerns about Australia's national security interests, given that CWO's satellites currently carry approximately 70 per cent of the Australian Defense Department's secret signals traffic. But the Defense Department has already told FIRB it has no objection to the SingTel takeover of Optus, after certain restrictions had been agreed.
Stokes said the deal threatened Australia's commercial interests, marking the third attempt recently by Singapore government-controlled companies to buy Australian assets, following bids by Singapore Airlines and the Port of Singapore Authority.
"Of equal concern is the realisation that when it gains control of such assets, those will be used to further the interests of the Singapore government, even where that adversely affects Australia's national interests," Stokes said in the submission.
SingTel remains confident that FIRB will approve the deal.
"Our discussions with the relevant authorities have been positive and are continuing," the company said in the response. "SingTel remains committed to resolving all relevant issues pertaining to FIRB approval."
FIRB is expected to hand down its decision on SingTel's bid for Optus next month. Stokes' comments have been widely reported in the Australian media, which have been conducting an ongoing debate as to whether unregulated foreign investment is in the national interest.