A New Zealand consortium led by Sir Michael Fay has
threatened a legal challenge if the Overseas Investment Office approves
a Chinese bid for the 16 farms formerly run by the Crafar family.
The
consortium which has Maori investors says it will seek a judicial
review if the OIO recommends in favour of the $210 million bid from
Shanghai Pengxin Corporation, a conglomerate with extensive Chinese and
international holdings, including in agriculture.
In receivership
since 2009, the Crafar farms became a bellwether for New Zealand's
foreign investment regime, after the OIO rejected a $230 million initial
bid from another Chinese bidder in 2010, on the basis that they failed
the "good character" test.
The OIO has been examining the Pengxin
bid for nine months so far, while the Crafar receivers, KordaMentha,
have set a deadline of January 31 for Pengxin to make its bid
unconditional.
So far, KordaMentha has declined to examine the Fay bid because it already has the better offer from Pengxin.
"The
legal approach seems to be the only avenue to bring some transparency
to the application information and the process behind the approval,"
said Alan McDonald for the Fay bid.
"Without legal action we will never know how the OIO reached their recommendation to approve the sale of the farms."
The
Fay bidders intend to argue that since Pengxin doesn't run dairy farms,
it cannot meet the Overseas Investment Act requirement that the bidder
"must have business acumen and experience relevant to the investment,"
Mr McDonald told BusinessDesk.
Pengxin appears to intend
circumventing that requirement by having state-owned farmer Landcorp
manage the Crafar properties for them - an approach already permitted
under OIO guidelines and approved for other non-farming foreign buyers.
NZN