Alarm bells ring over Crafar deals

Companies fronted by Auckland businesswoman May Wang, which are buying dairy farms on behalf of Chinese firm Natural Dairy NZ, may have broken foreign investment laws with the purchase of four Crafar family farms, the Overseas Investment Office said yesterday.

The office said it had started an investigation into UBNZ Funds Management's purchase of the Crafar farms in Norsewood, Waitotara and Manawatu in February.

Once purchased, the farms were immediately transferred to UBNZ Assets Holdings, which is 20 per cent owned by Natural Dairy NZ.

The other 80 per cent is held in Ms Wang's name on behalf of other investors who have so far chosen to remain anonymous.

The OIO said the purpose of its investigation was to obtain detailed information about the purchases.

"An application for consent for the farm purchases has not been received," said investment office manager Annelies McClure.

The farms in question were deemed to contain sensitive land under the Overseas Investment Act.

"It is an offence for an overseas person or an associate to buy sensitive land without consent and significant penalties apply," said Ms McClure.

Ms Wang said she was confident the investigation would prove there was no breach of the act.

"As I am a New Zealand citizen and Natural Dairy only has a 20 per cent stake - less than the 25 per cent trigger point for an OIO application - the purchase completely conforms with the act," she said.

Natural Dairy itself has submitted a retrospective application for the purchase of the four farms with a further 25 farms as part of its $1.5 billion plans to develop a New Zealand-based dairy business to supply the Chinese market.

However, the OIO said last month it had returned that application to the company as further information was needed.

"And the correct fee had not been paid," said Ms McClure.