Investment policy upsets company

Press, 30 June 1983, Page 8

Investment policy upsets company

PA Auckland Marac Holdings, Ltd, one of New Zealand’s biggest finance companies, was in an invidious position because of the Australian foreign investment controversy, said its managing director, Mr Grant Adams, yesterday.

The company wanted to find another Australian partner to buy the 50 per cent Australian share of the Sydney-based Marac Finance Australia, Ltd, but could not because of its poor trading record. Neither could take up the 50 per cent itself because of the foreign investment rules. The New Zealand company bought into Marac Finance Australia in 1980 (then known as Greater Pacific Finance) to complement its merchant banking activities already under Australian Government restriction.

The seller, which retained 50 per cent, was guaranteed that an alternative Australian shareholder would be found.

“Soon after the company incurred trading losses,” Mr Adams said. “Because of this we had to become more active. “The Australian Government’s attitude is that it does not care about the losses; it just wants another Australian shareholder in there,” he said. “Of course, this is an obvious impossibility in that a company that has incurred trading losses is not an attractive investment to the ordinary shareholder.” Mr Adams said that Marac would like to turn Marac Australia into a wholly owned subsidiary. He blamed the investment row on a commercial treaty, signed in Nara, Japan, between Australia and Japan that guarantees non-dis-crimination in foreign investment in Australia. The chairman of Broadlands Finance, Ltd, Mr lan Small, said yesterday that the Foreign Investment Review Board had given his company until November to divest itself of 10 per cent of its shareholding in Broad-

lands Finance, Ltd, oi Perth. He has written to the Prime Minister, Mr Muldoon, about the situation. The instruction pre-dated the foreign investment dispute. Broadlands has a 60 per cent share in the Australian company, with the balance held by the Australian public. In the past, Broadlands has always had an exemption to the F.1.R.8.’s ruling on a 50 per cent local ownership based on the fact that the Broadlands company in New Zealand provided technical and managerial expertise in the Perth company. Mr Small said that the company had had no difficulties with the F.1.R.8. in the past, but had experienced a hardening attitude since the change of government in Australia. , “It really sticks in my

craw when you think of the Australian companies operating here,” he said. Broadlands and Marac are controlled by Fletcheii Challenge.