Forrest backs Hockey move on grain deal

Mining billionaire Andrew Forrest has described Treasurer Joe Hockey's controversial decision to ban the foreign takeover of GrainCorp as an "empowering act" that was necessary given the near monopoly status of the country's largest agribusiness.

Mining billionaire Andrew Forrest has described Treasurer Joe Hockey's controversial decision to ban the foreign takeover of GrainCorp as an "empowering act" that was necessary given the near monopoly status of the country's largest agribusiness.

Speaking after the second Australia-China Senior Business Leaders' Forum, which was set up in April to bring business leaders together, Mr Forrest told BusinessDay the GrainCorp decision sent a powerful message to China and other countries that Australia acted independently when it came to matters of national interest.

He said Australia's record of allowing foreign takeovers was near-perfect. Of the 130 applications that have come to the Treasurer's desk since the federal election in September, GrainCorp is the only one that has been declined.

He said the issue of GrainCorp was one of a number of topics discussed at the business leaders' forum, held in Sydney on Saturday. It followed a dinner with Prime Minister Tony Abbott on Friday night.

Guests at the forum included Frank Lowy, Seven chairman Kerry Stokes, Macquarie boss Nicholas Moore, Business Council of Australia chairman Tony Shepherd, Li Ruogu, the chairman and president of Import-Export Bank of China, Chang Zhenming, chairman of CITIC Group Corporation, Wang Boming, president of the Stock Exchange executive council and editor-in-chief of Caijing magazine and Cao Huiquan, chairman of Hunan Valin Iron & Steel Group Company.

GrainCorp shares lost almost a quarter of their value after Mr Hockey said on Friday that the US grain trader's $3.4 billion takeover proposal was contrary to the national interest.

The decision to block the investment drew criticism from the Business Council that it risked undermining Mr Abbott's election-night pledge that Australia was open for business.

Still, Mr Forrest said the Treasurer's decision to block the takeover by the US food behemoth would not have been an easy one but it sent a message that Australia would block a takeover if it was not in the national interest, despite its friendship with the US.

"This is an empowering act to reinforce that we act independently," Mr Forrest said.

"In the case of GrainCorp, the decision was necessary given the concentration of power in a near monopoly situation.

"The upshot is whenever you have got such concentration of market power there, consideration needs to be given to more than one set of stakeholders, the shareholders."

GrainCorp handles 75 per cent of eastern Australia's grain crop and 90 per cent of its bulk grain exports.

The company supplies 35 per cent of eastern Australia's grain to international buyers and 25 per cent to domestic consumers.

Other topics of discussion at the Australia-China Senior Business Leaders' Forum included the Foreign Investment Review Board, the free-trade agreement between Australia and China and the 3rd Plenum Decision, which promises far-reaching economic reform policies including opening the door to greater foreign participation in China's services sector.

Mr Forrest said the meeting reaffirmed the importance of building long-term relations based on "trust", "transparency and mutual benefit".

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