Published 24 December 2010
Cabinet Ministers Maurice Williamson & Kate Wilkinson declined consent on Wednesday for Natural Dairy (NZ) Holdings Ltd to acquire 20 Crafar farms.
The decision unwinds the completed sale of 4 farms by the receivers of Nugen Farms Ltd. Sale of the other 16 was awaiting the Overseas Investment Office’s approval.
Overseas Investment Office manager Annelies McClure said the ministers concurred with the office’s recommendation that consent should be declined.
Under the Overseas Investment Act, decision-making ministers must decline consent if they aren’t satisfied that all of the relevant criteria for consent under the act have been met.
Ms McClure said: “One of the criteria for consent is that ministers must be satisfied that all of the individuals with control of an overseas person are of good character. The ministers were not satisfied that all of the individuals with control of Natural Dairy were of good character. Accordingly, consent was declined.”
Natural Dairy had identified a market in China for milk products which could be guaranteed as being 100% produced & processed in New Zealand. The initial business plan was to acquire the Crafar farms, and possible more land later, along with a milk treatment plant to produce long-life packaged milk for sale in Asia.
The application involved 6 transactions. 4 were retrospective and related to the acquisition in February of 4 farms from the receivers of Nugen (director Robert Crafar, son of Crafarms head Allan Crafar). The last 2 transactions related to acquisition of 16 farms from the Crafarms companies of Allan Crafar.
In the first transaction, UBNZ Funds Management Ltd (May Wang 100% shareholder) applied to buy 4 farms from Nugen Farms Ltd (receivers John Whittfield & Dennis Wood of McDonald Vague appointed December 2009, liquidators appointed March 2010) & Windburn View Ltd (when the acquisition was made in February, Robert Crafar was one of 3 directors and Nugen held one-third of the shares).
In the second transaction, UBNZ Funds Management was to sell those 4 farms to UB Assets Holdings Ltd (May Wang again 100% shareholder). In the third transaction, UBNZ Trustee Ltd (May Wang 100%) was to sell those 4 farms to Natural Dairy (NZ) Holdings Ltd. Ms Wang held 17.45% of Natural Dairy through UBNZ Trustee and British Virgin Islands-registered company Super Worth International Ltd. Her reluctance to admit that interest was a primary cause of Associate Judge Hannah Sargisson not believing Ms Wang’s evidence in her High Court application for an insolvency scheme, the consequent failure to win court approval of the scheme and Ms Wang’s bankruptcy.
The fourth transaction, in March, involved UBNZ Assets Holdings – by then with Natural Dairy as 20% shareholder, May Wang 80% – taking out a mortgage on the 4 farms.
In the fifth transaction, UBNZ Assets Holdings was to buy 16 farms from 4 of Allan Crafar’s companies of which Brendon Gibson & Michael Stiassny (KordaMentha Ltd) were appointed receivers in October 2009 – Ferry View Farms Ltd, Hillside Ltd, Plateau Farms Ltd & Taharua Ltd. In the sixth transaction, UBNZX Trustee was to sell the 16 farms to Natural Dairy.
The Crafarms receivers had a conditional agreement to sell those 16 farms for $213 million.
At Nugen, South Canterbury Finance Ltd, owed $12.74 million, appointed the receivers. The receivers sold Norsewood & Waitotara for $10.1 million, and the mortgagee sold Kerikeri for $3.4 million. Full sale amounts are complicated by milk & stock figures.
Link: Crafar decision summary
13 December 2010: May Wang seeks suspension of bankruptcy order
9 December 2010: The Wang week…..
8 December 2010: Judge rejects May Wang’s insolvency scheme, appeal filed
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Attribution: OIO & ministerial releases, story written by Bob Dey for the Bob Dey Property Report.