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. The scheme was aimed at taking companies that needed funds but could not use tax credits in their own right and linking them with corporates which needed tax credits, he said. Macquarie Bank, Bain and Co, AusAsean Advisers, and Bankers Trust Australia have called on the government to remedy the situation immediately 'to enable this valuable tax concession programme to continue'. They said the programme encouraged R & D projects that were commercially focused and which could generate export income and other long-term benefits for Australia. The programme had led to the development of successful products and technology in telecommunications, computer software, biomedicine, electronics, industrial and scientific equipment and agriculture, they said. 'It is imperative that the guidelines be ratified at the earliest possible opportunity,' the group said. 'This action would be fully supported by industry participants.' Peter Cook, Australia's Industry Minister, has said the government would give high priority to remedying the oversight.