The majority shareholder of one of New Zealand's biggest agriculture companies is being investigated on good character grounds by the Overseas Investment Office (OIO).
PGG Wrightson Photo: Facebook / PGG Wrightson
The China-based company Agria owns slightly more than 50 percent of PGG Wrightson through its Singaporean subsidiary, having first bought into the company in 2009 and extending its shareholdings in 2011.
Agria was removed from the New York Stock Exchange in November 2016, which said it had evidence Agria was artificially inflating its share prices in order to stay listed on the Exchange.
Companies must maintain a share price of at least $1 per share over 30 consecutive days' trading in order to stay listed.
The subsequent fall in share value led some shareholders to take out class-action lawsuits against Agria and some of its directors.
The OIO said the USA's Securities and Exchange Commission had also subpoenaed Agria about its business operations in China.
The law required anyone wanting to invest in significant business assets to have appropriate experience and acumen, a demonstrated financial commitment to the investment, be of good character and does not face entry restrictions to New Zealand.
PGG Wrightson - which is based in Canterbury - is one of the country's largest agriculture companies, specialising in grass seed.
It employs more than 2100 people in New Zealand and took in more than $1 billion in revenue last year, with a net profit of more than $46 million.
A spokesperson said PGG Wrightson's independent directors Bruce Irvine, John Nichol and Ronald Seah have formed as a committee to consider the implications of the investigation.
In a statement an Agria spokesperson said the company had always made full disclosure to the OIO and would assist it fully with any enquiries.
