China-Australia relations: Beijing slams Canberra for ‘politicising’ canned US$230 million deal on national security grounds

State-owned China State Construction Engineering Corporation has dropped its bid for the Australian builder of the tallest residential tower in Sydney, Probuild, after indications that Australian Treasurer Josh Frydenberg would block the deal on national security grounds.

This did not escape Beijing’s attention, and on Tuesday China’s Ministry of Foreign Affairs cautioned Canberra not to “politicise” business deals and jeopardise long-standing commercial relationships, as well as agreed-upon free trade between the two countries.

Probuild’s South African parent company, Wilson Bayly Holmes – Ovcon (WBHO), said in a statement that China State Construction Engineering Corporation had walked away from its unsolicited proposal to pay a reported A$300 million (US$231 million) for its 88 per cent stake after receiving communications from Australia’s Foreign Investment Review Board (FIRB) and Frydenberg.

Frydenberg, who presides over the FIRB, has the power to call off a deal even if it has been given the go-ahead by the advisory body. The FIRB does not generally provide information on its decisions.

WBHO said the deal was all but done after the completion of six months of due diligence. It had announced the bid in June and over the second half of 2020 said the Australian Probuild management team had been “intimately involved in the transaction and were committed to the successful completion of the steps to finalise it”.