The Australian government has approved the acquisition of Chinese firm Moon Lake Investments of Van Diemen's Land Company. It was sold for A$280 million and the foreign firm needs to comply with the Australian tax law. Breaching of the conditions may result in fines, prosecution and possible liquidation of the asset.
Treasurer Scott Morrison stated that the approval from the Foreign Investment Review Board will create 140 local jobs. Additionally, it will boost intended additional investment of more than A$100 million and anticipated additional 95 jobs.
"In forming my view I have carefully considered the national interest test and how it applies to this case, including the likely impact on local jobs and increased investment to support economic growth," he said.
He said that Moon Lake needs to conform to the Australian Taxation Office instructions and advise of any business deals with non-residents which could downgrade tax, according to The Australian.
Foreign acquisitions are delicate political matter in Australia, strongly disagreed by nationalistic politicians as they see it as a threat to food and water security at a time where global demand rises. China is usually an argument because many Chinese firms are state owned. Presently, China is the largest investor in Australia's agricultural sector.
Mr. Morrison informs that the sale approval of the Van Dieman's Land Co. to Moon Lake's Chinese businessman Lu Xianfeng comes with conditions that they should comply with the country's taxation policy.
"It will ensure increased employment and investment in an important industry sector in Tasmania, while the safeguards we have put in place will ensure they pay their tax," Morrison said in a statement. "Australia continues to welcome and support foreign investment that is not contrary to our national interests," reports MarketWatch.
Van Dieman Land Co. is an agricultural corporation in Tasmania. It was established in 1825 and in the same year, received a royal charter and was granted 250,000 acres. The firm consisted of London merchants who planned venturing in wool growing to supply demands in British textile industry, according to Wikipedia.
The new owner of Tasmania's biggest dairy wants to even more develop the assets' potential for long periods and to improve more of the VDL brand in both national and international markets. TFGA chief executive Peter Skillern cited that the acquisition was good news for the State and industry.
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