The Treasurer, John Dawkins, should be wary of allowing Canadian media enterpreneur Conrad Black to increase his company’s share of the Fairfax Group from 15 per cent to 25 per cent. Mr Black’s application is being considered by the Foreign Investment Review Board. The board has only advisory power and the decision ultimately is in the hand of Mr Dawkins. The board, which advises on general considerations of national interest, has a record of recommending in favour of more than 95 per cent of foreign investment proposals in the past. That is largely because foreign investment in Australia has been generally in the national interest. In the case of Mr Black’s proposal, however, there are factors which suggest to the contrary.
Unlike much valuable foreign investment, Mr Black’s investment would not be of otherwise unavailable capital for a new venture. There is plenty of existing Australian capital available if Fairfax were to seek it, as was proved by the public float a year ago. Shares were then issued at $1.20. The float was fully subscribed and the price is now around $1.60. Further, there is no evidence that Fairfax would gain new technology or new expertise not otherwise available to it or not now being put into the group. New expertise and new technology is another important reason for seeking foreign investment.
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