Australian backlash threatens Singapore bourse merger

Greens leader Bob Brown, a key ally of Australia's fragile ruling coalition, expressed strong opposition over Singapore's "appalling" rights record, while a maverick cross-bencher said he didn't want to live in a country of "serfs".

The vocal objections raised further questions over the $8.2 billion merger, which needs approval by both Singapore and Australia, where it must overcome a number of hurdles.

The move, scheduled to complete in mid-2011, aims to create the world's fifth biggest exchange with a market capitalisation of about $12.3 billion as a regional trading hub to rival Hong Kong, Shanghai and Tokyo.

The deal will be studied by Australia's securities, foreign investment and competition watchdogs, as well as the central bank, and must be approved by Treasurer Wayne Swan.

Parliament -- where Prime Minister Julia Gillard holds just a one-vote majority in the lower house -- will then have to vote on amending the Corporations Act to allow ownership of more than 15 per cent in the ASX bourse.

Analysts say one significant hurdle could be the Singapore government's large stake in the SGX bourse, which could raise sovereign ownership concerns.

Jim Murphy, markets executive for the Treasury, said officials were yet to receive submissions and it was too early to comment on whether it could be approved.

"There are a number of regulatory issues that need to be worked through," he said.

Brown said the left-wing Greens would block the merger over Australia's chequered history with Singapore, remembering its ex-leader Lee Kwan Yew once called the country the "poor white trash of Asia".

He also noted that Singapore executed an Australian citizen, Van Tuong Nguyen, for drug-smuggling in 2005, and had a parliament dominated by one party and limited free speech.

"This is a state that tramples all over freedom of speech, democracy, the rights of oppositions, the ability for public discourse," Brown said.

"We don't see an advantage for this nation in having that stock exchange controlled from Singapore," he added.

Bob Katter, an independent MP allied with the opposition, said he would table a resolution blocking the deal.

"I have a desire some things in my country are left owned by my country. I do not wish to live in a country of serfs working for foreign landlords," he said.

Gillard said it would be "highly inappropriate" for her to comment but stressed any foreign investment must be in Australia's interests.

"I will say more broadly though that we are a great trading nation, we make our living by making our way in a globally competitive world. An open economy has been in Australia's interests when it comes to trade," she said.

"Yes, we see international entities wanting to invest in this country, major investments have to be the subject of proper scrutiny and proper processes, and they are."