Treasurer Josh Frydenberg halts Chinese takeover over national security risk

Treasurer Josh Frydenberg has barred a lucrative $300 million Chinese takeover bid over fears it could pose a national security risk.

Treasurer Josh Frydenberg has knocked back a $300 million Chinese takeover of a major building contractor in Australia on national security grounds in a move set to inflame the war of words between the two nations.

Fears that China could gain access to sensitive information about national infrastructure including Victoria’s police headquarters’ design and vaccine laboratories were a factor in the decision to ban the deal.

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Treasurer Josh Frydenberg has knocked back the bid. Picture: NCA NewsWire/Gary Ramage

In a statement, ProBuild’s South African owners Wilson Bayly Holmes told news.com.au the takeover had been rejected on “national security grounds”.

“WBHO has been advised by the potential acquirer of ProBuild that it has withdrawn its proposed investment application in ProBuild lodged with the Australian Foreign Investment Review Board following advice that its application would be rejected by the Federal Government on the grounds of national security,’’ it said.

The decision has been slammed by ProBuild executive chairman Simon Gray, who told the Australian Financial Review the decision was “a joke”.

“It’s more politics than it is anything else,” Mr Gray told Financial Review.

“No one can give us a real reason why we’re a national security risk. It’s a joke.”

It is understood Mr Frydenberg wrote to the parties late last year, prompting the application to the Foreign Investment Review Board to be withdrawn.

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ProBuild chief executive Simon Gray slammed the decision as “a joke”.

A spokesman for the Treasurer declined to discuss the private correspondence.

“The government does not comment on the application of the foreign investment screening arrangements as they apply or could apply to particular cases,’’ he said.

Mr Frydenberg has previously rejected China Mengniu Dairy Co’s proposed bid for Lion Dairy & Drinks and the CK Group’s bid for Australia’s east coast gas pipeline owner APA Group.

Australia is appealing to the World Trade Organisation over China’s decision to slap new tariffs on Australian barley imports.