Government to privatise science business, with weapons company a possible buyer

Staff are concerned KiwiStar will be sold to a company that makes weapons. Photo / US Marine Corps.

The Government has confirmed state-owned scientific optics company KiwiStar Optics is up for sale, meaning the organisation will almost certainly be privatised.

Kiwistar Optics currently makes high-grade equipment for telescopes and scientific purposes.

Last November, the Herald wrote about speculation of a sale to EOS, an Australian technology company that specialises in space and defence.

Written Parliamentary Questions to National's Chris Bishop have confirmed that EOS made two applications to the Overseas Investment Office to purchase KiwiStar.

The first application was received through the Emergency Notification Regime on April 15, 2021. This application was decided to not fall under the Overseas Investment Act at that time. A second approach was received through the National Security Public Order regime on September 16, 2021.

The agreement with KiwiStar appeared to briefly fall over. However, prospects of a sale are still alive. A deal could be inked as soon as tomorrow, with an announcement made shortly thereafter.

KiwiStar is owned by Callaghan Innovation, the Government's research and development agency.

A spokesperson confirmed the sale talks.

"Callaghan Innovation is still discussing the sale of KiwiStar Optics and we are unable to comment further at this time," they said.

The sale has caused disquiet inside the company.

Staff are understood to be concerned they may now be working for the weapons industry - a far cry from the scientific work they're used to carrying out.

KiwiStar has worked on defence contracts before. The company's website says it has also made lenses for a United States Navy navigation system.

The office of the responsible minister, Megan Woods, referred questions back to Callaghan Innovation.

Questions over KiwiStar's future go back to the time when Woods was an opposition MP, and National's Steven Joyce was the minister responsible for Callaghan Innovation.

At the time, she was asking him whether plans were afoot to licence or sell KiwiStar Optics' intellectual property to the Australian government.

This was despite about $1.4 million in public funds being invested in Kiwi Star Optics to fund its research and development.

That speculation resurfaced in August last year, when Bishop asked written questions to Woods asking her whether Callaghan was "in negotiations to sell or transfer ownership of KiwiStar Optics".

Again, Woods said she could not reply, saying Kiwistar was "a commercial business".

"As such, I am unable to provide details of any confidential and commercial negotiations that may or may not be happening," she said.

This has now changed, with all parts of the Government now openly discussing a sale.

EOS was approached for comment.