GRAINCORP'S biggest individual shareholder has applauded the federal government's decision to block the controversial GrainCorp sale, but the Australian Shareholders Association claims political interference has cost investors close to $1 billion.
Shareholders association spokesman Stephen Mayne said while investors recognised the sensitivity of GrainCorp's influential position as the dominant eastern Australian port and grain handling network operator, they would struggle to see how halting the sale was justified.
The $650 million slide in the value of GrainCorp's market capitalisation was justification enough to question the wisdom of federal Treasurer Joe Hockey's decision, Mr Mayne said.
He said given the extent of other overseas grain sector investments and takeovers allowed in Australian sector businesses in recent years, it was extraordinary GrainCorp's sale had not at least been given the green light with some regulatory conditions attached.
But Don Seaton, who holds about 2.2 per cent of GrainCorp's shares was far from disappointed that his warnings about the danger of an ADM takeover had been noted.
"I am very pleased by the Treasurer's decision," he said.
"The decision recognises that while foreign investment is immensely beneficial to Australia, this country needs a sound national strategy to govern foreign sourced investment in its agriculture sector.
"We need a strategy that fosters competition, preserves local industry and delivers long-term benefits to Australian farmers."
Mr Seaton stand against the ADM takeover on national interest grounds was made despite his personally being in the running to collect $30 million from the ADM offer.
As a former owner of the Gardner Smith grain trading and processing company, which was bought by GrainCorp last year, his opposition to the ADM takeover was based on a lifetime of commitment to the farm sector and a deep understanding of the market issues at stake.
"Australia is in the envious position of being the last piece in the global grain puzzle for foreign agribusiness companies," he said.
"The next step is to put in place industry-wide structural safeguards to ensure that future approaches by foreign agribusiness may be welcomed without the threat of damage to competition in our local industries."
"Today's economically sophisticated decision by the Treasurer allowing ADM to increase its stake in GrainCorp without a full takeover provides an opportunity for us to consider appropriate reforms to unlock the competition constraints in the agriculture sector."
But according to Mr Mayne while foreign ownership has never been politically popular in Australia, the nation had long relied on overseas capital to fund its agricultural sector growth.
"Now there are also 16,000 shareholders who have been penalised by the decision and the government has lost tens of millions in capital gains tax earnings because the sale won't go through."