20 Apr 2012

Sale of Crafar farms to Chinese group approved

4:05 pm on 20 April 2012

Government ministers have again approved the sale of the 16 Crafar farms to the Chinese consortium Shanghai Pengxin, after considering a fresh Overseas Investment Office recommendation.

The sale was initially approved last year but in January, after a judicial review sought by the New Zealand consortium Crafar Farms Purchase Group, the High Court ordered the Government to reconsider it.

Associate Finance Minister Jonathan Coleman and Land Information Minister Maurice Williamson announced on Friday that they have sought to apply the law in accordance with the Overseas Investment Act and the guidance of the High Court.

Mr Williamson says the application meets all the criteria of the act and the regulations, and "faithfully and carefully follows the guidance of the judge...in fact, if there was any doubt in his guidance, we erred on the side of caution to make sure that this decision was in line with what the High Court asked."

The Crafar family's dairy business went into receivership in 2009.

Rival bidder not surprised

The Crafar Farms Purchase Group, which has also been trying to buy the farms, says the Government's decision is disappointing but not unexpected.

The group's spokesperson, Alan McDonald, says iwi leaders involved with its bid are angry, because they feel as though they've been shut out of negotiations while the Government and the Overseas Investment Office worked hard to help the Chinese consortium.

"We just feel it's a bad decision, really," he says.

Mr McDonald says the group still has an appeal lodged with the Court of Appeal that could overturn the new deal.

Former owner Allan Crafar continues to argue that the properties should never have been placed in receivership. "I never accept that it should have happened in the first place," he says, "and I still believe that we were screwed over."

Mr Crafar says he's taking legal advice and will continue to fight to get his farms back.

Call for re-examination of investment rules

The chair of the New Zealand International Business Forum says the rules on foreign investment need to be re-examined to make sure the country attracts much-needed capital.

Sir Graeme Harrison, who is also the chair of ANZCO Foods, which is partly Japanese-owned, told Morning Report he hoped the decision on the Crafar farms will set clear rules for supporting trade opportunities.

He said the Government's goal of getting exports up to 40% of GDP cannot be reached without foreign investment.