Australian regulator against politically-driven foreign investments

The head of Australia's foreign investment regulator said in an interview today that state-owned enterprises and sovereign wealth funds should not be driven by a political agenda for investing in the resource-rich nation.

Brian Wilson, chairman of the Foreign Investment Review Board, or FIRB, said investment decisions should be made by investors on a purely standalone commercial basis and that Australian businesses, however they are owned, should be run on a purely commercial basis and not as an extension of the policy, political or economic agenda of a foreign government.

The board last year nixed a $8.9 billion buyout of local stock market operator ASC Ltd by part state-owned Singapore Exchange Ltd. The regulator scrutinises real estate investment and other proposals worth over $244 million Australian dollars.

Wilson's warning to state-owned enterprises, also known as SOEs, to keep politics from deals in Australia comes after opposition leader Tony Abbott sought tougher rules governing foreign investment. In a speech in Beijing last month, Abbott said Chinese investment in Australia was "complicated by the prevalence of state-owned enterprises."

However, according to Wilson, who recently met officials from the Chinese Investment Corporation during a visit to China, said relations with China were improving.

He said, it would be fair to say that the general feeling about the foreign investment process in Australia from the Chinese was probably better than it was two or three years ago.