SYDNEY — A federal court case initiated by Izzy Asper’s CanWest Global Communications against Australian government orders that it sell almost one-fourth of its stake in Network Ten has gained the Canadian group a slight reprieve. Three days, to be precise.
The case stems from an early-May edict by federal treasurer Peter Costello that CanWest reduce its 76% economic interest in Ten to 57.5% by Sept. 30, regardless of price, and that the stock be sold only to parties approved by Costello.
That edict came after a probe of CanWest by the Foreign Investment Review Board, which was prompted by an April finding by the Australian Broadcasting Authority (ABA) that said interests associated with CanWest had a 76% economic stake in Ten and controlled 52% of Ten’s voting stock, in breach of federal laws limiting foreigners to 15% voting stock in networks and prohibiting aliens from exercising management control over webs. The ABA gave CanWest until Oct. 3 to remedy the breach of law.
The affair stems from a series of complex share transactions earlier this year in which interests associated with CanWest financed the acquisition of 37% of minority stakes in Ten.
Late Friday, Justice Hill of the federal court struck down the treasurer’s orders but upheld those of the ABA, meaning CanWest must still sell its surplus stock in seven weeks, although the ABA may, if it chooses, give a maximum six-month extension.
“CanWest welcomes the rejection of the onerous orders imposed by the treasurer. We are assessing the decision with respect to the ABA,” Asper said.
Ten’s earnings before interest and tax rose 11% for the year ended June 30 to $114.3 million, while pre-tax profits jumped 12.8% to $108.7 million.