The Crafar Farms saga has entered yet another chapter, with King Country iwi Ngati Rereahu launching a challenge through the Supreme Court to stop the sale of the 16 farms to Chinese company Shanghai Pengxin.
At 4:50 on Tuesday afternoon, Landcorp CEO Chris Kelly thought his team would be carrying out due diligence on the state of the farms next Monday as it prepares to take up a management contract on the farms for Pengxin.
That was until the registrar at the Supreme Court phoned, 10 minutes before the appeal deadline, to tell him the iwi's Tiroa E and Te Hape B trusts had filed papers at the Court to challenge a decision by the Court of Appeal, which last month dismissed a bid to stop the sale.
The Court of Appeal case had been brought by the Crafar Farms Independent Purchaser Group, led by controversial merchant banker Michael Fay, and which included the two trusts. The Group had wanted to buy the farms itself - for NZ$171.5 million, well below the reported NZ$210 million Pengxin was willing to pay.
Two of the farms would have gone to the trusts.
NZ Herald reports the trusts are again challenging the Overseas Investment Office's ruling that Shanghai Pengxin had the necessary business acumen to allow them to purchase the farms. The Court of Appeal upheld this ruling, with the involvement of Landcorp a factor in the decision.
The Herald reported a "mystery benefactor" was bankrolling the legal challenge, and that it was not Fay.
Landcorp's Chris Kelly told interest.co.nz that Landcorp had pulled the plug on its due diligence plans following news of the appeal, as Pengxin had still not bought the farms.
If should be known by Christmas whether the Supreme Court would hear the case, he said. If it did, then it could take until halfway through 2013 before Landcorp got on the farms.
Landcorp was eager to do so, he said. The farms’ receivers had been in a very difficult position maintaining them. While the receivers were minimising their spending, they had not been spending one cent more than was necessary.
Despite the constant disruptions, Landcorp was "committed to this through to the end," Kelly said.
The Crafar farms were tipped into receivership by lenders Westpac, Rabobank and PGG Wrightson Finance, who were then owed about NZ$216 million, in October 2009 with KordaMentha appointed receiver. The receivership came after interest.co.nz revealed animal welfare issues at the farms.