Amendments in 2020 to the Foreign Acquisitions and Takeovers Act 1975 (‘FATA’), directed to the protection of Australian ‘national security’, may neglect deeper flaws in the general FATA framework. This is particularly so when foreign investment is directed to the control of Australian corporate entities whose business is neither a national security business nor an agribusiness, but nevertheless touches the national interest. Paradoxically, a regulatory gap arises. On the one hand, the Treasurer’s significant discretionary powers to determine corporate control under the 2015 amendments to the FATA are directed to regulating the investments of ‘foreign persons’ in Australian entities. On the other hand, the legal and regulatory principles on which the FATA framework is founded are the principles of corporate control, self-regulation and good governance embodied in Australian corporate law. This means that the Australian governance shadow, or the context of corporate governance, is presenting opportunities for competitive foreign investors, sometimes backed by foreign governments, to influence the ownership and control of Australian corporations. We conclude that the experience of the Takeovers Panel in contested acquisitions of critical corporate interests under the Corporations Act may provide a valuable model and source of information for the Treasurer continuously monitoring foreign control of Australian corporations.
|Number of pages
|University of Tasmania Law Review
|Published - 2022