China deal a case for review

UNCERTAINTY about investment in a Tasmanian dairy by its Chinese owner has renewed calls for a tightening of Australia’s foreign-investment approval framework.

The historic Van Diemen’s Land Company was bought from its former New Zealand owners last year by Chinese billionaire Lu Xianfeng for $280 million.

Mr Lu’s wholly owned company Moon Lake outbid an Australian consortium.

The purchase was approved by the Federal Government, partly on the strength of a promised $100 million investment in the farm to create 95 new jobs.

But a Chinese Government financial crackdown on capital outflow in response to China’s high level of domestic debt has hampered Mr Lu’s ability to access the money.

Tasmanian Greens senator and treasury spokesman Peter Whish-Wilson said the Federal Government should review the steps taken to approve the Moon Lake purchase.

“Reports that the VDL purchaser Moon Lake is in financial trouble are very concerning,” he said.

“Dairy is a large part of the economy of the North-West. It is the job of the Federal Government to ensure that foreign investors into regional economies do not create further financial instability.”

Senator Whish-Wilson said a Senate inquiry into the foreign-investment review framework had made recommendations on improving the system.

A spokesman for Federal Treasurer Scott Morrison defended the process, saying the acquisition was approved following a recommendation from the Foreign Investment Review Board.

And the Government expected all foreign investors to comply with the Foreign Acquisitions and Takeovers Act, he said. “Non-compliance with the Act may involve criminal penalties or other implications should a foreign investor be found to have provided false or misleading information.”