17 Feb 2014

Housing project compromises payouts

7:21 am on 17 February 2014

A Maori forestry owner has been told investments in social housing will cut the chance of payouts to its shareholders.

Ngati Hine Forestry Trust in Northland owns homes in Moerewa, Kawakawa and Kaikohe. It has borrowed money from Housing New Zealand to pay for the properties and has to pay back $3.2 million.

Following questions from beneficiaries, the Maori Land Court has held a review of the trust.

Judge Ambler said taking out the loan for the housing project was careless, and means dividends from the trust's other investments, such as tree harvesting, may have to be used to pay off the loan.

He said the trustees' first duty should be to ensure its forestry and other core investments are not jeopardised.

Judge Ambler says the commitment to the social housing portfolio will add to the financial pressure on the trust in the coming years.

On top of its block of woods, Ngati Hine Forestry Trust has kiwifruit orchards in Kerikeri.

The court says while the kiwifruit orchards are working well, the trust might need to make funds available for the potential impact of the PSA virus.