SPCS

SOCIETY FOR PROMOTION OF COMMUNITY STANDARDS INC.

Listed Chinese firm targets Lochinver and other NZ farm assets

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The National Business Review reported yesterday in its lead story:

The goal posts have shifted in the deal to buy Lochinver Station with a second Chinese company now involved in the overseas investment application process.

NBR ONLINE has learned Shenzhen-listed Hunan Dakang Pasture Farming is raising capital to acquire the New Zealand acquisition vehicle from Shanghai Pengxin Group.

The deal includes 16 Crafar farms and the 75% stake in Canterbury’s Synlait Farms, already acquired by Shanghai Pengxin, and also the potential acquisition of Lochinver, a 14,000ha property near Taupo….

Wellington man David Lane, who writes on the blog “Society for Promotion of Community Standards” [SPCS] says the recent delays lack transparency.

“The OIO [Overseas Investment Office] clerarly instructed Shanghai Pengxin to set up a wholly-owned subsidiary in New Zealand as an appropriate vehicle to purchase the Lochinver Station”.

Lane says if Dakang is now buying that subsidiary through An Yuan Dairy, the scheme runs counter to what the OIO requested.

‘Some 45% of the ownership of the assets will be in the hands of those who have not been scrutinised by OIO”.

Source: National Business Review. Story by Chief Reporter Duncan Bridgeman. 26 September 2014

For full article see: http://www.nbr.co.nz/article/listed-chinese-firm-targets-lochinver-and-other-nz-farm-assets-db-p-163047

Money laundering conviction for Natural Dairy duo involving HK$230m

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Two principals of a Hong Kong-based company that came close to buying New Zealand’s 22 Crafar farms have been convicted of laundering HK$230 million (NZ$36m).

The South China Morning Post said that a solicitor and the wife of a former director of listed company Natural Dairy (NZ) Holdings were convicted of the laundering.

Wu Wing-Kit, 57, was found guilty in the District Court of laundering HK$68.95m, while Ye Fang, 43, was convicted of dealing with the proceeds of indictable offences totalling HK$230m.

Natural Dairy (NZ) Holdings, known in New Zealand for its frontwoman, May Wang, had agreed to buy the Crafar family farms for NZ$375m.

Wu is Wang’s solicitor and Ye is the wife of Jack Chen, Wang’s business partner.

Prime Minister John Key at the time raised “concerns” about the sale of land to overseas interests.

In December 2010, acting on the recommendation of the Overseas Investment Office, the Government decided not to approve the application.

The rejection was based on the Government’s view that Natural Dairy were not fit persons.

The farms were later sold to another Chinese company, Shanghai Pengxin.

Full story: http://www.stuff.co.nz/business/10425426/Money-laundering-conviction-for-Natural-Dairy-duo

[Read more…]

May Wang charged with corruption – NZ Herald

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Former Crafar farms bidder May Wang has been charged with corruption in Hong Kong, over business dealings said to have happened here in New Zealand while she was trying to buy the dairy farms.

Hong Kong’s Independent Commission Against Corruption has charged the bankrupt May Wang with conspiring to bribe officials with two New Zealand properties and money laundering, and has issued a warrant for the arrest of Jack Chen for his role in the scheme.

For full article see: NZ Herald 19 October 2011

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10759961

Overseas Investment Office and “sensitive NZ land assets”

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The Overseas Investment Office (OIO) assesses all applications from overseas persons who intend investing in “sensitive New Zealand assets” – defined in the Overseas Investment Act 2005 (“the Act”)-as  “sensitive land” and “significant business assets”. All non-urban land with an area greater than 5 hectares and/or land greater than 0.2 hectares that adjoins the foreshore, is defined under the Act as “sensitive land”.

The OIO administers the New Zealand government’s investment policies, and reviews the OIO’s legislation – (“the Act”) – and delegated powers.  Consent must be obtained from the OIO before any such overseas investment is given effect under the transaction. The OIO has a statutory duty to enforce the law when “sensitive land” that has been purchased without consent is brought to its attention.

A serious offence is committed under the Act if such a transaction is  ‘effected’ without the puchaser or his agent  having first sought and subsequently gained, OIO consent.  Upon conviction, fines of up to $300,000 can be imposed by the Courts on any offending body corporate or a term of imprisonment of up to one year imposed on any peson convicted of such an offence. In addition the Crown is entitled to forfeit all assets acquired in such illegal trasactions.

Yesterday, the Dominion Post reported that the OIO had announced it had approved the “sensitive sale” of the Wairarapa’s historic Mataikona Station – a 1394-hectare (3427 acre) coastal sheep and beef run – to Zurich property broker Robin Haab – for $6 million, in July. In this case the purchaser did comply with the law.

Under the Act a foreign-owned company must gain OIO consent before it can acquire “sensitive land”. If the company purchasing this asset is a NZ-registered company that itself is wholly owned by an overseas registered company, consent must also be gained before the transaction is deemed to have been lawfuly effected. If the person directing such a foreign-owned NZ-registered company holds joint citizenship, such as NZ-US citizenship,  this fact does not allow him and/or his agent to ignore his obligations to the OIO under the Act. If such a person is director and owner of both companies he must comply with the law and obtain consent.

The Act itself received the Royal asent on 21 June 2005 and came into force on 25 August 2005. Prior to that the 1973 version of the Act was in force and it was administered by the Overseas Investment Commission (now called the OIO). The earlier Act also made it a serious offence for any overseas investment in the assets outlined above to be ‘effected’, without the consent of the OIC.

The OIO website summarises 24 decisions it issued in September 2005 with respect to consent applications made after the 2005 Act came into force on 25 August 2005.  Overseas based property investors seeking a slice of the New Zealand market at the time, had no excuse for not seeking consent – given the wide publicity given to the Act leading up to its enactment into law.

The Auckland High Court reinforces interpretation of Act by OIO……..

On 11 June 2010 the Auckland High Court dismissed the application by UBNZ Assets Holdings Limited and Natural Dairy (NZ) Holdings Limited for a declaration that they do not require consent under the Overseas Investment Act 2005.

This followed sale and purchase agreements for 16 Crafar farms signed in late May, which were conditional on consent under the Act.

Annelies McClure, Manager of the Overseas Investment Office, said the Court’s reasons for dismissing the application for the declaration supports the OIO’s view that consent may be required by UBNZ Assets Holdings Limited to purchase the farms.

“The Overseas Investment Act clearly sets out the requirements for overseas persons and associates of overseas persons seeking to purchase sensitive New Zealand land,” said Ms McClure. “The Court’s judgment further reinforces our interpretation of the provisions in the Act.”

References:

http://www.stuff.co.nz/dominion-post/news/5562597/Wairarapa-station-sold-for-6m-to-Swiss-family

http://www.linz.govt.nz/overseas-investment

Schedule 1 – Sensitive Land

http://www.legislation.govt.nz/act/public/2005/0082/latest/DLM358552.html?search=ts_act_overseas+investment_resel&p=1

 

 

Crafar Farm deal rejected by Ministers – At issue: Lack of “good character”

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“The Ministers were not satisfied that all of the individuals with control of Natural Dairy were of good character. Accordingly, consent was declined.” Ms Annelies McClure Manager OIO.

Overseas Investment Office Media release – 22 December 2010 – Copy

Ministers decline Natural Dairy application for Crafar farms

Hon Maurice Williamson and Hon Kate Wilkinson have today declined consent to the application by Natural Dairy (NZ) Holdings Limited (Natural Dairy) to acquire the Crafar farms.

Annelies McClure, Manager of the Overseas Investment Office (OIO), said the Ministers concurred with the OIO’s recommendation that consent should be declined.

Under the Overseas Investment Act 2005, decision-making Ministers must decline consent if they are not satisfied that all of the relevant criteria for consent under the Act have been met.

“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,” said Ms McClure.

“The Ministers were not satisfied that all of the individuals with control of Natural Dairy were of good character. Accordingly, consent was declined.”

[The Society applauds the National Government Ministers and the Overseas Investment Office for taking full and careful account of the criterion of “good character” of the prospective buyer, in arriving at this decision – in this case lack of good character].

A summary of the decision can be found at www.linz.govt.nz. [Read more…]