Papers show there was some pressure from China on the Government to approve Shanghai Pengxin's bid for the Crafar Farms and that the risk of damage to that relationship was a factor in the decision, despite ministers consistently saying there was no such lobbying and dismissing it as "a conspiracy".
Land Information Minister Maurice Williamson and Associate Finance Minister Jonathan Coleman yesterday approved the sale of the 16 Crafar Farms to Milk New Zealand, a subsidiary of the Chinese-based Shanghai Pengxin company.
Milk New Zealand spokesman Cedric Allan said it was delighted by the outcome and hoped to be on the farms within a month after finalising the sale from farm receivers. It would also set up a joint venture with Landcorp which will manage the farms.
Before approving the bid, Williamson sought advice from Foreign Minister Murray McCully because the Overseas Investment Office was unable to say whether rejecting the deal would affect New Zealand's image overseas or its trade relations.
In reply, Mr McCully said the Government had been able to explain the situation to China's "decision makers" so far, but "there is little doubt that a reversal of ministers' earlier approval would be difficult to explain satisfactorily". It would also affect other international investors.