Australia’s Treasurer Scott Morrison has blocked the sale of S Kidman’s cattle property to Chinese investors, citing national security concerns.
China’s Genius Link Group and Shanghai Pengxin have been vying for ownership of Australia’s biggest cattle lands, valued at more than A$350 million ($251 million; €234 million), in recent months.
Morrison said in a statement that it was “now a matter for the vendor to consider how they wish to proceed with offering the composite interests of S Kidman for sale”, suggesting properties could be broken up and sold piecemeal.
Morrison however said as Kidman’s holdings accounting for 1.3 percent of Australia’s landmass, the estate that was up for sale was already “significantly larger than the next biggest rural landholding in the country”.
Kidman owns 10 cattle stations across South Australia, Western Australia, the Northern Territory and Queensland covering 101,411 square kilometres. But Morrison added that one station in particular, Anna Creek, had raised security concerns because half of its pastoral lease is located in the Woomera Prohibited Area (WPA) of South Australia, a weapons testing range.
“The WPA weapons testing range makes a unique and sensitive contribution to Australia’s national defence and it is not unusual for governments to restrict access to sensitive areas on national security grounds,” he said.
Morrison said he had taken advice from the Foreign Investment Review Board (FIRB) to come to the decision that it “would be contrary to Australia’s national interest for a foreign person to acquire S Kidman in its current form”.
The move to cut off the deal, which was being handled by Ernst and Young, comes as Australia lowers its foreign investment threshold for privately-held Chinese companies. FIRB is expected to ratify rules that will mean non-state-owned companies can invest up to A$1 billion in the majority of Australian businesses without review, instead of the A$248 million threshold that exists now.