Ann: CKI Proposal APA Grants Due Diligence, page-24

FIRB and other OZ government entities should overwhelmingly reject CKI's bid for most of APA's assets.

First, agreeing to this acquisition would be hypocrisy. The ACCC has complained for two years that APA alone is too monopolistic (Sims wants APA to be under more regulation, which partly explains APA's suppressed share price). Yet CKI also owns considerable downstream gas assets, mainly in Australian Gas Networks (AGN). Allowing the combined behemoth would put the ACCC in a hypocritical position -- APA is getting too big, but it's OK for CKI to create a much larger monopoly.

Second, CKI would face a conflict of commercial interests if it acquires eastern APA assets because APA is a supplier to AGN. No independent management, no regulator, could possibly remove the taint that CKI will favour AGN over competitors in its relationship with the upstream (currently APA) supply chain.

Third, APA's gas infrastructure is such a significant and integral component of the national economy that no political leader would sleep well if it is owned by a private overseas company. That CKI is located in a China-controlled territory is even more worrisome. Remember, this is not sinophobia or paranoia. The intelligence organizations of several major countries have explicitly warned politicians about Chinese overseas interference.

CKI's offer to exclude WA assets of APA is laughable (and I live in WA!). In fact, the reverse is more feasible: CKI might be granted APA's WA assets because (a) they probably don't create a conflict of interest liability with CKI's other OZ assets and (b) they are not a critical chokepoint of risk in the national infrastructure.

I won't even begin a tirade on CKI's action 2014 to acquire Envestra (now AGN). Although CKI did have a higher bid price, I recall that APA's bid for Envestra was thwarted by CKI before CKI even made its bid