A planned multibillion-dollar merger of the Sydney and Singapore stock exchanges faced a fierce political backlash yesterday, as a senior Australian Treasury official warned that the deal also posed “regulatory issues.”
Greens leader Bob Brown, a key ally of Australia’s fragile ruling coalition, expressed strong opposition over Singapore’s “appalling” rights record, while a maverick cross-bencher said he didn’t want to live in a country of “serfs.”
The vocal objections raised further questions over the US$8.2 billion merger, which needs approval by both Singapore and Australia, where it must overcome a number of hurdles.
The move, scheduled for completion in the middle of next year, aims to create the world’s fifth-biggest bourse with a market capitalization of US$12.3 billion as a regional trading hub to rival Hong Kong.
The deal will be reviewed by Australia’s securities, foreign investment and competition watchdogs, as well as the central bank, and must be approved by Treasurer Wayne Swan, who promised “extensive regulatory consideration.”
Parliament — where Australian Prime Minister Julia Gillard holds just a one-vote majority in the lower house — will then have to pass an amendment allowing ownership of more than 15 percent in the Australian Securities Exchange Ltd (ASX).
Analysts say sticking points may include the Singapore government’s large stake in the Singapore Exchange Ltd (SGX), which could raise sovereign ownership concerns, and the board’s composition with 11 Singapore representatives and four from Australia.
Swan said parliament had the final say, but urged lawmakers to bear in mind Australia’s long-standing goal of becoming a regional financial services hub.
“We will continue to consider all transactions with the objective of carefully and methodically building Australia’s reputation as a financial services hub,” he said.
Jim Murphy, markets executive for the Treasury, said officials had not received submissions and it was too early to comment on whether the bid could be approved.
“There are a number of regulatory issues that need to be worked through,” he said.
Brown said the left-wing Greens would block the merger on moral grounds, and remembered that Singapore’s former leader Lee Kuan Yew (李光耀) once called Australians the “poor white trash of Asia,” comments he later revoked.
He also noted that Singapore executed an Australian citizen, Van Tuong Nguyen, for drug-smuggling in 2005 despite Canberra’s pleas for clemency, and had a parliament dominated by one party and limited free speech.
“This is a state that tramples all over freedom of speech, democracy, the rights of oppositions, the ability for public discourse,” Brown said.
“We don’t see an advantage for this nation in having that stock exchange controlled from Singapore,” he added.
Bob Katter, an independent MP allied with the opposition, said he would table a resolution blocking the deal.
“I have a desire some things in my country are left owned by my country. I do not wish to live in a country of serfs working for foreign landlords,” he said.
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