Prime Minister John Key hasn’t seen anything to make him question the Overseas Investment Office, which is facing a potential judicial review over its processing of an application by a Chinese investor to buy local farms.
China’s Shanghai Pengxin has until the end of the month to get OIO approval to buy the Crafar family farms before receiver for the farms KordaMentha can turn down its offer, in a process that has attracted intense scrutiny and faces a judicial review from a rival bidder.
The office’s transparency has been questioned by investment banker Michael Fay, who’s part of the rival consortium, but the Prime Minister hasn’t seen anything to question the OIO.
“Any decisions I’ve seen them make I’ve had no reason to question them so far,” Key told reporters at a post-Cabinet press conference.
Cabinet today briefly discussed the OIO’s recommendation on whether Pengxin should be cleared to buy the Crafar family farms, and Land Information Minister Maurice Williamson and Associate Finance Jonathan Coleman will have the final say on whether to approve the deal, Key said.
“If they’re going to meet the 31 January timeline, they’ll need to make their decision soon, and they’ll publicly communicate that,” he said.
The Crafar Farms Purchase Group yesterday filed papers in the High Court in Wellington in an effort to block Pengxin’s bid, and a hearing is understood to be scheduled for tomorrow.
The Fay-led consortium, including Tiroa E and Te Hape B Trusts, Tauhara Hapu Trusts, Aitchison Farms, WD Holmes 2000 Trust, Donovan Group and Brent Cook launched a rival $171.5 million offer in September, believed to be some $30 million below Pengxin’s bid.
The purchase group tapped anti-foreign ownership argument in putting up its rival offer, after the purchase of large blocks of farmland by foreigners was raised by Natural Dairy NZ’s failed offer to buy the Crafar farms in 2010. That prompted the government to impose stricter controls on overseas investment, backing away from an initial stance to ease restrictions.
Key talked down the extent of foreign ownership of local farmland, saying he understood it to be less than 1 percent.
“The wholesale sale of land in New Zealand is not in New Zealand’s best interests, and that was why we sought to toughen up the overseas investment act,” he said. “At around about 1 percent, I don’t think we have a substantial issue.”