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foreign takeover guidelines released

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    http://au.news.yahoo.com//080122/2/15lgo.html
    Sunday February 17, 07:40 PM
    Foreign takeover guidelines released
    Markets, companies and investors have been given an insight into how federal Treasurer Wayne Swan will handle any attempt by Chinese miner Chinalco to buy a larger stake in resources company Rio Tinto.

    The Chinese government-owned Chinalco this month grabbed a strategic 12 per cent stake in Rio Tinto, the world's third-largest mining company.

    Chinalco's 12 per cent stake - which also is the subject of a takeover bid by Australian mining giant BHP Billiton - falls short of the 15 per cent barrier which triggers a Foreign Investment Review Board (FIRB) review.

    But Chinalco has voluntarily submitted its application to the board.

    Without commenting directly on Chinalco, Mr Swan released six principles which would guide any future decisions.

    He said he released the guidelines, used by previous governments, to enhance the transparency of Australia's foreign investment screening regime.

    "In recent months there has been high public interest and commercial interest in investments by foreign governments and their entities," Mr Swan told reporters in Brisbane.

    "Today, I am releasing principles that are used on a case-by-case basis to judge whether particular investments are in the national interest or not.

    "... I thought it was in the national interest for there to be openness, to set out these principles so they can be there for everyone to see."

    When asked if Sunday's announcement related to the Rio Tinto case, Mr Swan said he would not comment on any recent foreign investment proposals.

    "There are proposals for foreign investment in Australian companies that come across my desk every week and we apply the national interest test frequently, and there will be many more to come," Mr Swan said.

    "So, I don't make public comment about individual cases.

    "But we thought it was important given the high public interest, the high commercial interest, to set out these principles clearly, openly and honestly for everybody to see."

    A spokesman for Mr Swan later said the release was made to ensure that all interested parties could understand the guidelines that would be used.

    Mr Swan said the federal government welcomed foreign investment because it made an important contribution to national prosperity and the development of industries and resources.

    The six principles take into regard if an investor's operations are independent from the relevant foreign government, if an investor is subject to and adheres to the law and standards of business behaviour, and if an investment could hinder competition or lead to undue control in the industry or sectors involved.

    The guidelines also consider if an investment could impact on Australian government revenue or policies, on national security and the operations and directions of business.

    Mr Swan said the principles had not been kept secret but it was important to "put them out there to the public
 
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