The government will not appeal the High Court's ruling last month ordering the Overseas Investment Office (OIO) to set aside and reconsider its decision to allow the Crafar farms to be sold to a Chinese company, Prime Minister John Key says.
Speaking to media at his post-Cabinet press conference on Monday, Key said the government had "looked closely at it and we’ve decided not to,” when asked whether the government would appeal Justice Forrest Miller's ruling.
The OIO gave approval in January for Chinese company Shanghai Pengxin to purchase the 16 Crafar farms after spending nine months considering Pengxin's bid, which is thought to offer in the region of NZ$210 million for the farms.
But a rival consortium of New Zealand investors led by merchant banker Michael Fay, which has publicly said it would pay NZ$171.5 million for the farms, challenged the OIO's decision via a judicial review in the High Court.
In February, Justice Forrest Miller of the High Court ruled the OIO had not applied the Overseas Investment Act correctly when assessing the economic benefits that would flow from Pengxin's bid, and ordered the OIO to set aside and reconsider its decision.
At first, the OIO said it would make its revised decision within a matter of days, although that has stretched out to almost a month now as they had to wait for legal advice from Crown Law on how to apply the High Court ruling.
Key had not previously ruled out the government appealing the High Court ruling, but had indicated that it would not be likely.
The rival New Zealand consortium, called the Crafar Farms Independent Purchaser Group (CFIPG) is appealing part of Justice Miller's ruling, which said the OIO had applied business experience requirements in the Overseas Investment Act correctly. The consortium argued Pengxin did not have experience in dairy farming.
Pengxin responded by noting its agribusiness experience, which included ownership of sheep-breeding operations in China, and cropping farms in China and South America.
The Crafar farms group was tipped into receivership in October 2009 owing about NZ$216 million to its lenders Westpac, Rabobank and PGG Wrightson Finance after interest.co.nz revealed animal welfare issues at the farms. KordaMentha is the receiver.