LONDON, England - Former Conservative cabinet minister Jim Prentice says strict rules are needed if state-owned enterprises are allowed to invest in Canada.
In a speech to the Oil and Money 2012 conference in London, Prentice said current turbulence over investments by state-owned enterprises in Canada may have caught some in the international community by surprise.
However, Prentice, now a senior executive with Canada Imperial Bank of Commerce (TSX:CCM), says the controversy has building in Canada for years.
It recently came to a head with a couple of major takeover deals — including a $15.2-billion bid by state-owned China National Overseas Oil Corp for Nexen Inc. (TSX:NXY). The bid, made last August, is still under review by Ottawa.
More recently, the federal government turned thumbs down on a $6-billion offer by Malaysia's state-owned oil company, Petronas, for Canada's Progress Energy Resources (TSX:PRQ). Petronas still hopes that deal will eventually be approved.
Prentice says that while it would be "patently unwise" to turn down investment from countries like China, he says the government must ensure there are clear rules involving governance and investment transparency.