Property developers fined $123k for breaking overseas investment rules

Property Editor·NZ Herald·

15 Dec, 2019 10:34 PM2 mins to read

Court ruling means owners must pay $123,000 plus $10,000 costs. Photo / file

The owners of a Birkenhead property have been fined $123,000 for failing to get consent from the Overseas Investment Office.

The High Court at Auckland has ordered FFG Investments and Grand Sky to pay the penalty, and $10,000 in costs, following an investigation by the office, according to a statement just issued.

FFG and Grand Sky have the same shareholders, the office said. Companies Office records show they are Yijun Feng and Yuntao Cai, both of Windsor Park in Auckland, and Fi Wen of Shan Xi in China.

Vanessa Horne, office group manager, said the companies both bought an interest in a property without first getting consent from the OIO.

"Overseas investors wanting to buy sensitive land in New Zealand must get consent from the OIO," she said.

"It's important that overseas investors, particularly those intending to undertake residential developments, fully comply with the Overseas Investment Act. When we discover anyone who has broken the rules, we take appropriate enforcement action," she said.

FFG bought the property in October 2013. Two years later, FFG sold it to Grand Sky. FFG and Grand Sky intended to carry out a residential development there.

When FFG bought the property, and later when Grand Sky entered into an agreement to buy the property from FFG, the companies' shareholdings meant they were considered overseas people under the act.

However, by the time the title was transferred to Grand Sky it was no longer considered an overseas person under the OIO rules.

Horne said the office has an important role in protecting New Zealand's sensitive land.

"We take our role very seriously and will continue to pursue cases where people have bought land illegally," she said.