Australian lawmakers attack Singapore ASX takeover

[October 26, 2010]  CANBERRA, Australia (AP) -- Key lawmakers on Tuesday signaled they might scuttle the Singapore Exchange's $8.3 billion cash and shares takeover offer for the operator of the Australian bourse.

Opposition Liberal Party treasury spokesman Joe Hockey raised concerns that the takeover, announced Monday, was not in Australia's national interest, while Greens Party leader Bob Brown said he was swayed against the deal by Singapore's human rights record.

The two parties command a majority in the Senate where they could block the deal which has yet to be approved by a range of regulators.

The takeover of Australian Securities Exchange Ltd., the monopoly stock market operator known as ASX, by a company part owned by the Singapore government would create the world's fifth-largest stock exchange company by market value.

Brown said he was concerned by Singapore's human rights record and by the island state's execution of an Australian drug smuggler in 2005 despite Australian government pleas for his life.

"We should tell them nothing doing," Brown told reporters at Parliament House of the deal.

"This is a state that tramples all over freedom of speech, democracy, the rights of oppositions, the ability for public discourse," he said.

Hockey said Singapore competed with Australia for jobs in the financial sector and the government needed to explain how Australia would benefit from a combined stock exchange company headquartered in Singapore.

"We've got to consider carefully, when a monopoly in the Australian market is being bought out by an overseas interest, whether that is in our interest," Hockey said.

Prime Minister Julia Gillard said it would be "highly inappropriate" for the government to comment on the takeover, which has yet to be examined by the government's Foreign Investment Review Board, to judge whether it would be in Australia's interests.

"I believe questions of foreign investment should be looked at through proper processes," Gillard told reporters. "We should be guided by Australia's national interest and our prosperity."

Treasurer Wayne Swan would make the final decision, after receiving the board's advice, on whether the takeover should be allowed.

But the parliament could block the necessary regulatory changes.

Swan told parliament on Tuesday that he would also seek advice from the central bank and corporate regulator on the national interest question.

"We will continue to consider all transactions with the objective of carefully and methodically building Australia's reputation as a financial services hub and as always will do this in the national interest and I ask all members in this parliament to do the same," Swan said.

Market doubts that the deal would gain regulatory approval dragged the ASX share price down in early trading, said Shaw Stockbroking senior dealer Jamie Spiteri. The stock fell 5.5 percent to 39.46 Australian dollars ($39.10) after gaining more than 20 percent the day before.

The ASX is set to lose its monopoly on operating a stock market in Australia in 2011 and an affiliate of Chi-X Europe is planning to set up a trading system once the monopoly is abolished. Singapore, meanwhile, has long lagged behind Hong Kong and Tokyo as a regional financial center.

The exchange operating company formed from the takeover of ASX would have a market value of $12.3 billion and be responsible for some 2,700 listed companies.

[Associated Press; By ROD McGUIRK]

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