Big buyout of farms raises suspicions

Criticism is mounting over a Maori trust buying up thousands of hectares of prime southern land, possibly on behalf of foreign investors.

Federated Farmers and the Green Party are crying foul over aspects of the offers, believed to total more than $150 million made for 28 farms.

Federated Farmers said yesterday it was "very nervous" about reports deposits may not have been paid, and the Greens claimed the trust might be acting as a "proxy" for foreign interests to engineer a "land grab" and avoid requirements under the Overseas Investment Act.

"The Overseas Investment Act needs to be strengthened to protect New Zealand's sovereignty. We must ensure we pick up any attempt to use proxies to avoid the intent of the act," Greens co-leader Russel Norman said.

The trust's spokesman is Invercargill-based Wynn Murray, who this week declined to name the organisation or confirm rumours it was financed by Dubai interests.

But he did confirm the trust had some overseas backing.

He did not return calls yesterday.

In late November, state-owned investment business Dubai World stunned the financial world when it announced it was defaulting on payments of $83.5 billion property-fuelled debt for six months, US$10 billion ($14 billion) of which has since been paid by another Emirate, Abu Dhabi.

Federated Farmers' rural security spokesman, David Rose, cautioned farmers to "conduct strict due diligence" before entering into any sale agreements for their farms.

"I am extremely nervous of reports that no deposits are being taken. It is pretty fundamental that a deposit be exchanged as a tangible sign of good faith," Mr Rose said.

Mr Murray told the Otago Daily Times earlier that deposits would be paid when contracts were finalised, by late February or early March.

Mr Rose said that given Dubai, and Dubai World's "pressing business issues" over the default, he was concerned the "supposed backer may not be prioritising the purchase of Southland farms".

He added: "The fact that a reported deposit milestone has already been missed is further cause for alarm."

Mr Rose urged farmers to seek legal and independent advice and to insist on taking a deposit.

Dr Norman claimed the Government should stop trying to weaken "already loose rules" covering overseas investment.

"Should overseas interests buy up large chunks of New Zealand's primary production, we risk losing sovereignty," he said.

- OTAGO DAILY TIMES