Published 19 January 2012
A third person associated with Natural Dairy’s attempt to buy the Crafar family’s portfolio of farms has been charged in Hong Kong with conspiracy to defraud and appeared in court on Wednesday.
Natural Dairy’s bid – fronted in New Zealand by Chinese businesswoman May Wang (now known as May Hao) – was rejected by the New Zealand Government in December 2010, a fortnight after Ms Wang was adjudicated bankrupt.
The receivers of the Crafar portfolio got a new Chinese offer, by the Shanghai Pengxin Group Co Ltd, in January 2011. It’s still in front of the Overseas Investment Office. Meanwhile a 10-member New Zealand group, whose members want to buy the farms in the portfolio individually, said today they’d seek a judicial review of the Overseas Investment Office approval process if the office approved Shanghai Pengxin’s offer.
In Hong Kong, the Independent Commission Against Corruption charged Yee Wenjye (40, also known as Eric Yee, of Avondale), a Singaporean national & New Zealand resident, with one count of conspiracy to defraud Natural Dairy (NZ) Holdings Ltd, its directors & shareholders, by falsely representing that the 22 farms owned by the CraFarms Group had made a profit of $18.5 million for the May 2009 year. The commission alleged the company had in fact made a significant accounting loss of about $30 million.
The chief executive of New Zealand’s Serious Fraud Office, Adam Feeley, said the charge was consistent with the evidence the SFO had uncovered in a joint investigation.
“The further charge reinforces our initial view as to the best options for law enforcement. We concur with the additional action being taken by the independent commission and believe our law enforcement efforts can be most effectively applied to supporting the commission case through the evidence of SFO forensic accountants involved with the investigation.”
The first person charged in Hong Kong over the Natural Dairy deal was May Wang (now known as May Hao), who’d fronted bid vehicle UBNZ Assets Holdings Ltd. She was charged on 17 October 2011 with one count of conspiracy to offer advantages to an agent and 2 counts of dealing with property known or reasonably believed to represent proceeds of a crime.
The Hong Kong commission charged Jack Chen (also known as Chen Keen) 4 days later with one count of conspiracy to offer advantages to an agent and one count of dealing with property known or reasonably believed to represent proceeds of a crime.
Ms Wang & Mr Chen also reappeared in court yesterday. Mr Yee is alleged to have conspired with them in misrepresenting the financial strength of the Crafar farms. All 3 are due back in court on 18 April.
Hong Kong-listed Natural Dairy has been suspended from trading since 7 September 2010.
Mr Feeley said the case underscored the increasing importance of sharing evidence & resources with overseas law enforcement agencies: “I think it is unlikely either agency would have progressed this case as effectively without the joint investigative efforts which occurred, and it is likely to become an increasing feature of our cases in the coming years.”
Warning of judicial review application
A recommendation to approve the sale of the Crafar Farms to the Shanghai Pengxin Group will lead to a Judicial Review of the Overseas Investment Office (OIO) approval process.
Crafar Farms Purchase Group spokesman Alan McDonald confirmed today that the group of iwi & farmers had retained Alan Galbraith QC and law firm Bell Gully to lead a legal challenge if the Overseas Investment Office recommended approving the Shanghai Pengxin deal.
Mr McDonald said: “The legal approach seems to be the only avenue to bring some transparency to the application information and the process behind the approval. Without legal action, we will never know how the office reached their recommendation to approve the sale of the farms.
“The Overseas Investment Act does not permit consent to be granted for the acquisition of farmland by overseas persons with no relevant farming expertise. Shanghai Pengxin is a construction & property development company that has no expertise in dairy farming. The Chinese are passive investors relying on Landcorp to add the farming component.”
Bell Gully partner David Cooper said a letter had been sent to the Overseas Investment Office last week advising it of the commitment to seek a judicial review and asking for a copy of the Shanghai Pengxin application for consent or other relevant information.
The Crafar Farms Purchase Group consists of 10 independent buyers, including the Tiroa E & Te Hape B Trusts (represented by Hardie Peni) and Sir Michael Fay, who all have current dairy farming interests in the central North Island. Mr McDonald said the group had come together as the receivers insisted on selling the farms in one package. Each farmer in the group had been allocated the properties they had an interest in buying, with no farmer seeking more than 2 farms.
18 April 2011: Shanghai Pengxin lodges Crafar application
24 December 2010: Government rejects Natural Dairy bid for Crafar farms
13 December 2010: May Wang seeks suspension of bankruptcy order
9 December 2010: The Wang week…..
9 December 2010: May Wang bankrupt
8 December 2010: Judge rejects May Wang’s insolvency scheme, appeal filed
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Attribution: SFO & purchase group releases, story written by Bob Dey for the Bob Dey Property Report.