AUSTRALIAN regulators are scrambling for cover after discovering that the country's A$2 billion (about HK$11.1 billion) research and development (R & D) syndication industry is at risk because of an administrative oversight.
The oversight means that Industry Research and Development Board guidelines regulating the approval of the R & D syndication programme have been invalid.
Under the programme, Australian financial institutions get corporates to invest in R & D programmes that are in an advanced state of development in return for tax breaks or credits.
It allows companies close to commercial breakthroughs to get funding, while offering corporates tax relief as well as potential profits on their investments.
The guidelines have been in operation since 1992. A group representing the major players in the market have urged Canberra to fix the oversight to clarify the legal status of existing R & D loans or investments.
'They are in a technical limbo, I suppose,' said Richard Gibson, a director of Bain & Co Corporate Finance.
'The solution is to introduce a legislative amendment to retrospectively validate the guidelines - at the moment the guidelines are invalid.' Mr Gibson said the R & D covered the information technology, telecommunications, pharmaceutical, bio-medical, defence, aerospace and agricultural sectors.