A lawyer representing a group of New Zealand farmers wanting to oust a Chinese buyer of the so-called Crafar farms argued the Chinese investor is just “putting money up” and intends to be only a passive investor.
The High Court in Wellington heard on Friday that the sale of 16 farms owned by the Crafar family to Shanghai Pengxin is still conditional on the buyer being satisfied with the terms of the consent. There was one outstanding item. The receiver KordaMentha yesterday extended the time for the deal to go unconditional to Feb. 7.
Two ministers approved the sale after receiving a recommendation from the Overseas Investment Office. The price has not been disclosed but there has been speculation of a $210 million figure.
Alan Galbraith QC, representing New Zealand buyers seeking to overturn the sale, argued the Chinese buyer was a passive investor in an industry in which he had no experience.
Shanghai Pengxin is ultimately controlled by Chinese businessman Jiang Zhaobai.
The involvement of state-owned farm manager Landcorp as a manager of the farms was fundamental to the recommendation of approval of the application.
Galbraith said the test in the law covering overseas investment requiring buyers to have experience and acumen was personal to the individual buyer otherwise “it is no test at all”.
Anyone with lots of money could buy farms in New Zealand and get a manager in. “It could be Microsoft,” he said.
“All the applicant ... is bringing to the application is money and the contract with Landcorp,” he said.
“The inquiry is about the personal expertise of individuals in control not whoever they may hire,” he said.
Galbraith said that the sale of farm land in New Zealand had always been sensitive. It was a privilege for overseas persons to own sensitive New Zealand assets.
Farms in New Zealand mostly sold to the farmer next door but this farm sale had been marketed as a bulk lot.
Justice Forrest Miller said the defence will argue the plaintiffs do not have standing and should not be in court.
He said the plaintiff, in exploring the idea of relevant experience, seemed to imply that those buying dairy farms needed to know one end of a cow from another.
Galbraith argued that businesses like Fletcher Challenge and New Zealand Farming Systems Uruguay had had terrible experiences operating in other countries even in areas of the same generic experience of their existing business.
The court heard that the Chinese buyer was essentially a property developer.
The buyer has outlined plans to invest in the farms and argues it can help develop China as a market for dairying.
(BusinessDesk)
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