Published 23 April 2012
Land Information Minister Maurice Williamson and Associate Finance Minister Jonathan Coleman approved the new recommendation of the Overseas Investment Office last week to grant consent to Chinese-owned & Hong Kong-incorporated Milk NZ Holding Ltd to acquire the 16 Crafar farms.
The buyer is a subsidiary of Shanghai Pengxin Group Co Ltd and is ultimately controlled by Jiang Zhaobai, who built his fortune in construction in Hong Kong.
Mr Williamson said: “New Zealand has a transparent set of laws & regulations around overseas investment. Those rules recognise the benefits that appropriate overseas investment can bring, while providing a range of safeguards to protect New Zealanders’ interests. They are applied evenly to all applications, regardless of where they are from.
“We have sought to apply the law in accordance with the provisions of the Overseas Investment Act and the guidance of the High Court. We have carefully considered the OIO’s new recommendation. The OIO sought advice from Crown Law and independent legal advice from David Goddard QC. The ministers also sought advice & clarification from Mr Goddard.
“We are satisfied that on even the most conservative approach this application meets the criteria set out in the act and is consistent with the High Court’s judgment.”
Dr Coleman said the consent came with stringent conditions: “These 27 conditions have been imposed to ensure Milk NZ’s investment delivers substantial & identifiable benefits to New Zealand.”
The conditions require Milk NZ to invest $16 million into the farms and to protect & enhance heritage sites.
The sensitive land being acquired comprises 15 farms owned by 4 Crafar family-controlled companies which are in receivership & liquidation (Plateau Farms Ltd, Hillside Ltd, Taharua Ltd & Ferry View Farms Ltd). Their common directors & shareholders are Frank, Alan & Elizabeth Crafar. The 16th farm is jointly owned by Hillside Ltd (80%) and 2 other individuals. The farms cover 7892ha.
Shanghai Pengxin intends to invest $100 million over the next 5 years to promote New Zealand dairy products in China & elsewhere in Asia.
Link: LINZ, decision & summary
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Attribution: Ministerial release, story written by Bob Dey for the Bob Dey Property Report.