Listed Synlait and Karl Ye's company New Zealand Industrial Park appear to be at a standoff.
Listed Synlait and Karl Ye's company New Zealand Industrial Park appear to be at a standoff.
A businessman trying to stop Synlait Milk continuing to build a new factory at Pokeno is unlikely to back off or be bought off given earthworks on his own neighbouring $1 billion tourism development are due to start within weeks.
Listed Synlait and Karl Ye's company New Zealand Industrial Parkappear to be at standoff over covenants on the Synlait land, with Ye considering seeking an injunction against the Canterbury-based infant formula maker to stop further progress on its well-advanced $280 million new plant in the north Waikato town.
Ye owns a property adjacent to the Synlait site, part of 323 surrounding hectares he has bought in parcels since 2017 for a large agri-tourism development, including a 250-room hotel and showcase farm.
A spokesman for Ye said earthworks for the development, which over time could see about $1b invested, would start in July.
Synlait in February 2018 announced the conditional purchase of 28ha of land in Pokeno to build its second nutritional powder manufacturing site. Commissioning was due to start next week.
In a notice to the NZX earlier this month reviewing the background, Synlait said due to the Pokeno land being rezoned industrial land from grazing land, and development in the area including building of another dairy plant, Synlait was confident that land covenants on the property no longer remained relevant.
The covenants allowed the land to be used only for farming, lifestyle blocks or forestry.
Ye's spokesman said the covenants were for another 180 years.
Synlait chief executive Leon Clements says the company intends to continue with its plans at Pokeno. Photo / Michael Craig
Synlait said its confidence about the covenants no longer being relevant was confirmed when the High Court removed the covenant in November last year. Synlait only took legal title to the land after the High Court decision, the notice said.
But Ye took the case to the Court of Appeal, which earlier this month reinstated the covenants. Synlait responded that it was confident the covenants issue could be resolved by the "parties". They include Stonehill Property Trust, the seller of the land to Synlait.
Synlait chief executive Leon Clements said in a May 10 notice to the sharemarket, after the court ruling, the company intended to continue with its plans at Pokeno.
Ye's lawyers Buddle Findlay responded with a "cease and desist" request to Synlait.
Ye's spokesman on Wednesday said Synlait had formally responded to the "cease and desist" request, which had a time frame of 5pm on Friday, May 24.
"Synlait's response indicated that they would keep to their construction as planned," said the spokesman.
Synlait's dairy factory in Canterbury. Photo / Ross Setford
Synlait on Wednesday said chief executive Clements was not available to speak. A follow-up Herald question on what was Synlait's formal response to the "cease and desist" request was not answered by publishing time. Nor did Synlait answer whether it had stopped work at Pokeno.
Ye, said his spokesman, was now working through the Court of Appeal decision with his legal team and "an injunction was being considered as an option to ensure the implementation of the three Appeal Court judges' decision".
Several efforts by the Herald to speak to Ye, who is managing director of GMP Pharmaceuticals, an Australasian food nutrition company with a factory in East Tamaki, Auckland, were unsuccessful. His spokesman, who declined to be named, responded instead.
Asked why Ye did not speak for himself, the spokesman said, "Like all businessmen, he is busy."
The Herald understands Synlait supplies GMP with product for its pharmaceutical products. But the spokesman emphatically rejected any suggestion Ye was a dairy industry competitor to Synlait.
Peter Bishop of Stonehill Property Trust, which sold the land to Synlait, was not available and did not return the Herald's call. Stonehill is a division of Auckland property development and consultant Euroclass.
