Concerns about possible Chinese manipulation of the share price of takeover target Bellamy's Australia Limited appear to have been taken seriously by the federal government, a Greens Senator says.
Greens Tasmanian Senator Peter Whish-Wilson in September raised concerns Chinese interests might have manipulated the Tasmanian-based organic baby food and formula company's share price leading into a $1.5 billion takeover bid by partly state-owned China Mengniu Dairy Company Limited.
His suspicions were based on the long delay former market darling Bellamy's faced in getting Chinese import approvals, an issue which would have damaged its share price.
The share price spiked after the takeover bid was announced, but had earlier slumped from nearly $21 in March 2018 to less than $8 by June this year.
It closed at $12.90 on Wednesday.
Senator Whish-Wilson wrote to Treasurer Josh Frydenberg about his concerns after the bid was announced.
They also included whether any Chinese government activity related to Bellamy's was inconsistent with the Foreign Acquisitions and Takeovers Act's national interest test.
He asked Mr Frydenberg to consider what precedents existed for a takeover by a foreign company in which a nation state was the bidder's biggest shareholder and the nation state's regulatory decisions had affected the target company's valuation.
On Thursday, Senator Whish-Wilson said he had had meetings about the issue with the Foreign Investment Review Board and Mr Frydenberg's office.
He said the content of the meetings was confidential, but he was "confident they are taking my concerns seriously and scrutinising the issues raised".
"Normally they would dismiss me out of hand.
"They've been very keen to talk to me.
"At least he (Mr Frydenberg) is doing his job."
The deal would need approval from the Foreign Investment Review Board and Bellamy's shareholders.
The Treasurer has the power to block it.
In September, Mr Frydenberg said the government did not comment on specific foreign investment matters.
"Australia maintains a non-discriminatory, case by case approach to considering foreign investment proposals," he said.
He said foreign investment was an important contributor to Australia's economy and standard of living.