Dairy farm bid affiliate known to fraud office

Photo / Brett Phibbs

Interests associated with Hong Kong-listed Natural Dairy - which is seeking to buy New Zealand dairy industry assets worth hundreds of millions of dollars - have already been subject to scrutiny by authorities including the Serious Fraud and Overseas Investment Offices.

Natural Dairy this week set alarm bells ringing over its plans to buy $1.5 billion of dairy farms and milk-processing plants here.

Farmers groups and Opposition MPs fear the firm's plans may prove to be the start of a big overseas buy-up of what is our biggest export industry.

However, the Government is taking a hands-off approach, saying the Overseas Investment Office (OIO) process is strong enough to protect the national interest.

Through its 20 per cent-owned New Zealand subsidiary UBNZ, Natural Dairy yesterday clarified its plans, saying it was in the process of buying 22 farms - previously owned by the Crafar family but now in receivership - for what is thought to be about $300 million.

The firm said it was trying to raise $1.5 billion to fund a buying spree in New Zealand.

UBNZ has already purchased four other former Crafar dairy farms. That prompted an OIO investigation as the office suspected UBNZ was effectively buying on behalf of Natural Dairy, and it had not sought approval.

The OIO's investigation was suspended after UBNZ retrospectively applied for the necessary approval.

UBNZ's directors include Sir Ngatata Love, former head of the Maori Development Ministry Te Puni Kokiri, and Aucklander May Wang, an 80 per cent shareholder.

Ms Wang has a history of business failures and is due in court next week on charges in relation to her Dynasty Group, which is now in liquidation.

Two years ago, she was the subject of a Serious Fraud Office investigation and next week faces Companies Office charges of failing to keep adequate accounting records and failing to assist liquidators.

Deputy Prime Minister Bill English yesterday said there had been an overreaction to Natural Dairy's plans, given the scant information available.

Natural Dairy has submitted an OIO application for its latest proposed acquisition and Mr English said he was confident the deal would be vetted thoroughly. Asked about the credibility of Natural Dairy, its business associates, and its offer for Crafar farms, he said: "That is something that would come to the surface in the process of going through the OIO.

"There's a good investor test in there and they need to be an acceptable investor. There's also a character test. We'll see what the OIO does here."