The decision means Mr Black, proprietor of the Daily Telegraph, will be able to consolidate his control over the Fairfax group, in which he has held 15 per cent since 1991.
It also raises new questions about the future moves of Kerry Packer, the Australian media tycoon who recently acquired 10 per cent of Fairfax. He is the second-biggest shareholder after Mr Black and is thought to have his sights on eventual control.
Fairfax publishes some of Australia's most profitable newspapers, including the Sydney Morning Herald, the Age, of Melbourne, and the Australian Financial Review. A consortium led by Mr Black acquired control in late 1991 after the newspapers' parent company fell into receivership. Mr Packer was an original partner in the consortium, but dropped out after a political storm over his already extensive media ownership.
Mr Black's initial holding in Fairfax, through his quoted vehicle, The Telegraph, was limited under guidelines set by Australia's Labor government confining to 20 per cent an individual foreign interest in newspaper companies. Knowing that his 15 per cent made him vulnerable to a powerful predator such as Mr Packer, and compromised his ability to impose managerial changes, Mr Black formally applied last year to lift his holding to 25 per cent.
The Labor government yesterday approved the application. In doing so, it anticipated the controversy surrounding Mr Black taking more of Fairfax and announced a new general policy raising to 25 per cent the maximum foreign interest by a single shareholder in what it described as 'mass circulation newspapers'.
John Dawkins, the Treasurer, said the move reflected the need of foreign investors to safeguard their financial and managerial commitment to newspapers. The Australian Council of Trades Unions and five prominent Labor MPs lobbied the government to reject Mr Black's request and yesterday's decision day drew strong attacks from across the political spectrum.Reuse content