Lochinver Station: Are foreign buy-ups of NZ farms ‘milking NZ dry’ ?

Pure 100 Farm Limited, directed by Shanghai-based billionaire Zhaobai Jiang, is a New Zealand registered company that has entered into a sale and purchase agreement to buy the 3,843 hectare Lochinver Station near Taupo which has a capital value of $70.6 million. It is currently awaiting approval from the Overseas Investment Office to proceed with the deal. The company is wholly-owned by the NZ registered company Milk New Zealand Holding Ltd (Co. no. 3883536) which is wholly owned by the NZ registered Milk New Zealand Investment Ltd. The latter company, wholly owned by Hong Kong registered Milk New Zealand Holding Ltd, was incorporated and registered in the tax-haven – British Virgin Island (BVI) according to a June 2014 Report by Hunan Dakang Pasture Farming Co Ltd. The NZ Companies Office website provides no hint that this investment company is an overseas company and only provides a NZ contact address for it: “Suite 1, 139 Vincent Street, Auckland Central, Auckland, 1010, New Zealand”.

See Company “Ownership diagram”, Overseas Investment Decision 22/01/14, Page 71 (Appendix 6)

Note: Milk New Zealand Investment Ltd (BVI) is wholly owned by Milk New Zealand Holding Limited (“Milk NZ) [see diag. ref. above].

Milk NZ which was incorporated in Hong Kong and was the successful bidder of the 16 Crafer Farms in 2012. Milk NZ is currently awaiting NZ government approval for the purchase of Lochinver Station and is wholly owned by Shanghai Pengxin Group Co Ltd (“SPGL”), which in turn is wholly owned by Nantong Yingxin Investment Co. Ltd (99% owned by Jhobai Jiang and 1% by Lei Jiang). SPGL was incorporated in Shanghai, China, in March 1997 and is a subsidiary of Chinese company Nantong Yingxin Investments Co Ltd.

The OIO Decision on Milk NZ’s application to purchase the Crafer farms does not mention that it owns Milk New Zealand Investment Ltd (BVI) and through it the NZ registered Milk New Zealand Holding Ltd.

See: See: http://www.linz.govt.nz/sites/default/files/docs/overseas-investment/oio-recommendation-crafar-farms-20120127.pdf]

Both Pure 100 Farm Ltd and the NZ incorporated New Zealand Investment Ltd share the same registered office, Level 34, Vero Centre, 48 Shortland St, Auckland, 1010, and have as sole director Zhaobai Jiang, whose residential address is No. 57, Lane 2188, Hongqiao Road, Shanghai, China. [See: www.companies.govt.nz].

If the Lochinver sale is approved by OIO and signed off by two NZ Ministers of the Crown, as required by law, and Chinese authorities, it will be the second-biggest foreign acquisition of NZ land. It follows on from Shanghai-Pengxin’s highly controversial $200 million purchase in December 2012 of the 7,892.5 ha Crafar farms in the Central North Island, involving its joint venture purchase with Landcorp NZ. This was the largest foreign acquisition of New Zealand farm land by value by any foreign buyer. (Shanghai Pengxin has also recently purchased 4,471 ha of the Synlait Farms).

Stevenson Group, the owner of Lochinver Station, agreed to sell this sheep, beef and dairy support farm situated 92 kms NW of Napier on the Napier-Taupo Highway, to Shanghai Pengxin and ran an extensive tender process to secure the current sale and purchase agreement.

The Crafar farms were purchased by Shanghai Pengxin (via its 74 per cent holding in SFL Holdings Ltd), and involved an application for approval to the OIO by Milk New Zealand Holding Ltd (“Milk NZ”) acting as nominee of SPGL. On 19/01/12 the OIO released its decision [link cited above] approving the purchase and it required Milk NZ to register in NZ as an overseas company under the NZ Companies Act 1993, prior to acquiring the investment. Prior to the application Milk NZ had no current interests in NZ. Its subsidiary was formed and registered in NZ “to acquire and then own the Crafar Farms and other assets and, if the opportunity arise – any further dairy or agricultural related investments by its parent group in NZ.” (OIO decision 19/01/12).

According to Terranet land records, Pengxin New Zealand Farm Group Ltd (NZ), also owned by Milk New Zealand Holding Ltd (NZ) currently owns 76 properties in New Zealand including 16 Crafar Farms as noted above.

The OIO decision dated 16 April 2012 concerning the Crafar Farms defines Milk New Zealand Holding Limited as owned by “Zhaobai Jiang, China People’s Republic of (99%) and Lei Jiang, China People’s Republic of (1%).” [via Shanghai Pengxin and Nantong Investment]

Pure 100 Farm Ltd, Pengxin New Zealand Farm Group Limited (formerly called Waikato Farm Ltd) and Milk New Zealand Holding Ltd [NZ] were all incorporated in NZ in late June 2012 and Zhaobai Jiang was appointed as sole director of all three.

Milk New Zealand Holding Ltd is listed on the Companies Office website as owning eight companies including Pure 100 Farm Ltd and Pengxin New Zealand Farm Group Limited.

See NZ Companies Office websi: www.companies.govt.nz

MILK NEW ZEALAND HOLDING LIMITED (Co. No. 3883536)

Level 34, Vero Centre, 48 Shortland St, Auckland Central, Auckland, 1010, New Zealand

MILK NEW ZEALAND DAIRY LIMITED (3900437) – Shareholder