New Zealand's largest alcohol company Lion has been fined $10,000 for breaching the Overseas Investment Act, which one anti-foreign investment leader says is laughable.
Lion copped the fine for buying South Island leasehold farmland four years ago and The Overseas Investment Office announced the penalty decision last week, saying thedeal dated back to 2017.
The office also announced $20,000 fines for other businesses that failed to seek clearance for buying land classified as sensitive, or where shareholding interests had changed.
Lion leased the land to grow grapes for red wine. Photo / Doug Sherring
Murray Horton of the Campaign Against Foreign Control of Aotearoa said the fines announced last week were "laughable" at just $10,000 to $20,000 each.
"The retrospective consent penalties were slaps on the wrists," he said of the OIO July decisions.
The Overseas Investment Amendment Act which came into force in July and companies flouting that was the reason for so many retrospective consents, he said.
"I think slackness is the most probable answer, knowing that if they go ahead without seeking consent they will only incur a laughable fine and get retrospective consent anyway, as opposed to being rejected or any substantive penalty," Horton said.
The OIO said Lion NZ paid $1.35 million for a 20-year lease of 19.5ha at 121 Aerodrome Rd, Blenheim.
It needed to seek clearance from the Crown because the company is 22 per cent owned by Japanese interests and 9.3 per cent by Americans.
"The applicant intends to continue using the land to grow pinot noir grapes which are processed into wine. This investment will result in greater productivity of the land. There will be increased processing of primary products for producing wine. The export of these wines would see increased export receipts for New Zealand. This investment also provides a stable, passive income for the Lessor and presents job opportunities," the OIO said of benefits to this country.
Lion's New Zealand wine portfolio includes Wither Hills, Leefield Station, Russian Jack, Te Hana, The Ned, Lindauer and Graham Norton and Tyrrell's.
Under the act, any more than 5ha of farmland is classified as sensitive.
The OIO said Lion's breach was "considered inadvertent which is why it was able to be resolved by it seeking retrospective consent and paying an administrative penalty".
Carrington Estate on Northland's Karikari Peninsula. Photo / Supplied
Lion said today that in June, it sought retrospective consent to approve a new lease on land it had leased since 2003.
"Given the long-term nature of this type of lease, change in Lion ownership during this time as well as changes to OIO rules for leases held for more than three years, we became aware that we would need to apply for consent after the subsequent 20-year lease had been signed. We successfully received retrospective approval in July," a spokesperson said.
In other cases, a Shanghai billionaire was fined $20,000 over the actions of a company he controls.
Damien O'Connor, Minister for Land Information and Associate Minister of Finance Megan Woods ruled in the matter.
Entities controlled by Gui Guojie got retrospective consent over control of the Carrington Estate and the Whatuwhiwhi Top 10 Holiday Park but had they not done that, the state was considering court action, possibly forcing sales.
"The OIO imposed an administrative penalty of $20,000 for the retrospective consent. If consent had not been granted, the OIO intended to progress its investigation and determine whether or not to apply to the court to require disposal of the assets acquired in breach and/or seek civil pecuniary penalties," a decision said.
In another case, a South Island rural land purchase by buyers including an Australian incurred a $20,000 fine because no consent was sought from the Crown agency to approve it.
The OIO said the buyer was nearly half-owned by Australian interests yet had not sought permission, required under the Overseas Investment Act.
The $1.7m purchase of 23ha of 469 Main Rd, Totara, near Oamaru from New Zealand's Quennith Farms is now approved, but the maximum fine was imposed.
A $20,000 penalty was imposed for a $1.3m land purchase of 4 Cambridge Rd, Manukau, and retrospective consent was granted. Americans Vishal Agarwal and Jagadeesh Kunda were allowed to buy the land from Cambridge Homes NZ shareholders.
Asked about retrospective consents, the OIO said there was no particular reason for so many in July.
"This is not indicative of a growing trend. It was simply a case of the office concluding several investigations where having the overseas person seek retrospective consent and pay an administrative penalty was considered the appropriate means to resolve their breach of the act," a spokesperson said this week.
