Stokes savages SingTel bid again

Australian media executive Kerry Stokes has launched a second scathing attack on the proposed US$8 billion takeover by Singapore Telecommunications Ltd. (SingTel) of local carrier Cable & Wireless Optus Ltd. (CWO).

In a lengthy submission to Australia's Foreign Investment Review Board (FIRB), Stokes said that control of Optus by the government-owned SingTel threatened both the security and the commercial interests of Australia. This is the second submission made by Stokes, who owns Australia's Channel 7 TV network, to FIRB relating to the takeover. The decision whether to allow the friendly takeover to go ahead lies with FIRB and its head, Australian treasurer (finance minister) Peter Costello.

In the submission, Stokes made several assertions. First, that the Singapore government uses SingTel as an instrument of control in its home market and could potentially extend that attitude to Australia if it gained control of CWO.

"Such government strategies and attitudes directly conflict with Australian values relating to freedom from surveillance and the right to privacy, as evidenced by recent Australian privacy law amendments to strengthen protection for individuals under privacy legislation," the submission said.

Second, any attempts to impose Australian law on SingTel's running of Optus could be difficult, Stokes said.

"Although Optus as an entity will continue to be subject to Australian law at a theoretical level, practical difficulties may arise in attempting to enforce Australian law against, in effect, a foreign government," he said in the submission. "In sensitive areas such as privacy and freedom of speech, international relations issues may intrude into the process, making enforcement of our law problematic."

Stokes also said there are grave concerns about Australia's national security interests, given that CWO's satellites currently carry approximately 70 percent of the Australian Defense Department's secret signals traffic. The Defense Department recently told FIRB it had no objection to the SingTel takeover of Optus, after certain restrictions had been agreed.

Stokes said the deal threatened Australia's commercial interests, marking the third attempt recently by Singapore government-controlled companies to buy Australian assets, following bids by Singapore Airlines and the Port of Singapore Authority.

"Of equal concern is the realization that when it gains control of such assets, those will be used to further the interests of the Singapore government, even where that adversely affects Australia's national interests," Stokes said in the submission.

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More about Australian Defense DepartmentCable & WirelessCWOForeign Investment Review BoardOptusSingapore AirlinesSingapore GovernmentSingapore TelecommunicationsSingtel

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