Court charges may not bar foreign farm ownership

A chequered past will not necessarily bar an overseas buyer from getting a stake in the New Zealand dairy industry. Photo / Mark Mitchell

The woman at the centre of a bid to buy New Zealand's largest family owned dairy business could still be granted Overseas Investment Office (OIO) approval, despite a chequered history involving failed business dealings here.

May Wang is due is to appear in court next month on charges brought by the Companies Office in relation to records of her Dynasty Group, which is now in liquidation.

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

However the OIO said a conviction would not necessarily shut someone out of foreign ownership of New Zealand land, if that person was deemed to be of good character.

The relevant ministers would need to be satisfied a conviction did not adversely affect the person's fitness to have that investment, the office said.

OIO manager Annelies McClure said any charges against a person would be taken into account in a good character assessment, but the existence of them may not preclude the criteria being met.

"It depends upon the relevance of the charge to the investment. For example, minor traffic offences may not be treated as being particularly relevant," McClure said.

The existence of criminal convictions was merely one factor in determining a person's character.

"Character" included moral factors and the reputation of the person concerned, the Land Information New Zealand website said.

Business experience and acumen, financial commitment and the "absence of ineligible individual(s) for exemptions or permits under the Immigration Act were also taken into account.

Chinese owned Natural Dairy Holdings Limited wants to buy the balance of Crafar Farms, through its 20 per cent-owned New Zealand subsidiary UBNZ, for what is thought to be about $300 million.

If granted, the transaction would be the biggest foreign investment in New Zealand since the government blocked a Canadian company's bid for a stake in Auckland International Airport.

Wang owns 80 per cent of UBNZ and has interests in more than a dozen local businesses, several of which have failed

Auckland District Law Society property committee convenor Bryce Town said Natural Dairy Holdings would need to have a very persuasive case for the OIO as to the economic benefits of its investment for this country.

"They certainly won't be rubber stamping this one (straight away). If they can show they are going to generate a benefit to the New Zealand economy then they will have a far better chance of getting through."

Meanwhile New Zealand land greater than the area of Waiheke Island has been approved for sale to foreign buyers every year since 2005, according to the Overseas Investment Office.

A Hong Kong company, Natural Dairy Holdings, has this week made a reported $1.5 billion bid for New Zealand dairying operations. Finance Minister Bill English said yesterday the Government would let the bid go through the Overseas Investment Office's processes.

The office's figures show it has approved transfers of more than 10,000ha - bigger than Waiheke Island, at 9200ha - of freehold New Zealand land to foreign ownership every year since 2005.

The biggest transfer during that time was about 290,000ha including freehold forestry land bought by the United States' Hancock Natural Resource Group in 2006. Kiwi billionaire Graeme Hart sold the land in a reorganisation of forestry products company Carter Holt Harvey.

Natural Dairy's bid, in comparison, is for 8000ha, though the investment estimate is the same at $1.5 billion.

It follows a $150 million bid by Dubai World to buy 30,000ha of Southland farms through a Northland-based hapu, Ngai Tupango, which fell through earlier this month.

For farmland, the largest recent sale was 3104ha in two Gisborne farms bought by Australian Phillip Maxwell Colebatch for an estimated $16 million in 2008.

Major land transfers since 2005:

* Hong Kong-based Natural Dairy's bid: Twice the combined areas of Rangitoto Island and Motutapu Island (8000ha, $1.5 billion) of farms based in the Bay of Plenty.

* Failed Dubai World bid: Three times the area of Waiheke Island (30,000ha, $150 million) of Southland farms.

* About half the area of Auckland region, from north of Wellsford to south of Pukekohe (290,000ha, $1.5 billion), in forestry transferred to the United States' Hancock Natural Resource Group in 2006.

* More than seven times the area of Auckland's CBD (3104ha, $16 million) of Gisborne farmland bought by Australian Phillip Maxwell Colebatch in 2008.

Net freehold land - which excludes leases - approved for sale to foreign buyers since 2005:

* 2009: 22,345ha
* 2008: 10,607ha, revised to 13,842ha at the end of 2009

* 2007: 16,102ha, revised to 15,826ha at the end of 2008

* 2006: 198,346ha, revised to 198,574ha at the end of 2007

* 2005: 48,287ha, as reported at the end of 2006