Asian banks apply to Australia

Press, 9 July 1983, Page 22

Asian banks apply to Australia

Asian banks keen to set up operations in Australia, have again raised the issue with the Australian Foreign Minister (Mr Hayden), it was reported from Hong Kong.

Hong Kong and Shanghai Banking Corporation leaders were among the business and finance representatives to meet Mr Hayden in the colony this week, and the bank is reported to be ready to settle for a substantial minority shareholding in any operation it sets up, to meet Australian Labour Party policy. The Hong Kong and Shanghai Bank already has a foothold in Australia’s merchant banking scene, but it also wants to get involved in trading bank activities.

The executive director of the bank, William Purves, told Mr Hayden on Monday that if it was allowed into the Australian market it would also open branches in the country area.

The bank made submissions to the Campbell inquiry into Australia’s financial system, but must now wait for the Labour Government’s review of the situation — the Martin Inquiry — before knowing if it will be allowed to set up operations.

New Zealand’s Britishowned National Bank is also seeking access to Australia, and the delay has prompted New Zealand’s Prime Minister, Mr Muldoon, to consider ejecting one of the two Australian banks from New Zealand in retaliation, the Hong Kong report says. Uncertainty over the future of Hong Kong is causing the business community there to look at relocation, and Australia is one of the obvious targets.

But Australian officials are keenly aware of the potential destabilisation that might be the result of large financial corporations moving vast sums in and out of the country. And while foreign banking

groups have been brought up short by Australia’s foreign investment laws, the spotlight was thrown on another facet of the regulations, this time governing foreign companies wanting to buy headquarters in Australia. The Treasurer, Mr Keating, recently heralded a tightening up of Australian foreign investment policies. One area that will be subject to that is the acquisition of properties by overseas companies for their own use.

At present, an overseas company operating in Australia has been able to buy a building of virtually any size providing it intends to use a substantial portion of it.

Reports this week said that the Foreign Investment Review Board had been told to tighten up on overseasowned Australian-based companies buying properties for headquarters. A board spokesman denied this,