Ministers approve Crafar farm sale to Chinese

Chinese company Shanghai Pengxin has been granted consent to buy the Crafar farms.

Land Information Minister Maurice Williamson and Associate Minister of Finance Jonathan Coleman have accepted the recommendation of the Overseas Investment Office (OIO) to grant consent to Milk New Zealand Holding, a subsidiary of Shanghai Pengxin Group, to acquire the 16 farms. NZ government-owned Landcorp will manage the farms.

Mr Williamson said it was clear the bid met the relevant sections of the Overseas Investment Act.

The approval follows the receiver KordaMentha’s acceptance in late 2010 of Milk New Zealand Holding's bid for the farms.

Conditions of the sale include investing more than $14m into the farms, making them more economically and environmentally sustainable. The Nga Herenga and the Te Ruaki pa sites must also to be protected, while walking access to the Pureora Forest Park and Te Rere falls is to be improved. An on-farm training facility for dairy farm workers will also be established.

The bid may have been approved but it is unlikely to be the end of the matter.

Yesterday in the Wellington High Court, David Cooper, a lawyer representing rival bidder Sir Michael Fay's consortium - which put in a much lower offer for the farms -, indicated that should the sale to Shanghai Penguin be approved, legal action would be taken against Milk New Zealand Holding to stop the sale.

The ministers refused to comment on the proposed legal action today, saying the matter was before the court.

Approval of the sale has been condemned by a member of Sir Michael's group, who said the decision was not only wrong in law but it set up open season on New Zealand land for foreign buyers.

Hardie Peni of Tiroa E and Te Hape B Trusts, said his people were “dismayed but not deterred” by the decision although he did not address the issue that the bid he is involved in is much lower than the successful one.

Prime Minister John Key also came under attack from Mr Peni.

“Last November, during the election campaign, Prime Minister John Key was only concerned about public opinion – but he now says public opinion does not count in this decision.

“The result is that all New Zealanders, and in particular Kiwi farmers, have been shafted.”

Mr Peni was concerned that Shanghai Pengxin had no background in farming.

Sir Michael said the group would seek a judicial review of the ministers’ decision.

“Back in September 2009, Finance Minister Bill English was justifiably boasting about law changes he had achieved to allow ministers to veto OIO recommendations for large-scale foreign buyouts of New Zealand farmland.

“That two ministers have failed to apply Mr English’s laws properly makes a mockery of his boasts.”

See a copy of the OIO’s recommendation http://www.linz.govt.nz/sites/default/files/docs/overseas-investment/oio-recommendation-crafar-farms-20120127.pdf