By Chris Whitworth
The Green Party is urging the Government to tighten “incredibly weak” foreign investment laws in New Zealand, after revelations of a Chinese company’s bid for farming assets worth $1.5 billion.
The China Jin Hui Mining Corporation – recently renamed Natural Dairy Holdings Ltd - told the Hong Kong stock exchange yesterday that it had entered negotiations to buy $1.5 billion worth of New Zealand’s farms, livestock and milk production facilities.
The deal includes 22 farms that were owned by the Crafar family. The group of farms were placed in receivership last year after run ins with the law over dirty farming practices.
Green Party co-leader Russel Norman says Natural Dairy’s proposal highlights the ease in which foreign companies can obtain mass amounts of New Zealand’s assets.
“I think it is a clear demonstration of why we need to tighten up the foreign investment laws in New Zeeland – which are incredibly weak, much, much weaker than most countries on the planet,” he says.
Labour is urging the Government to carefully consider the deal under a microscope before agreeing, but it already appears the purchase is in its final stages.
KordaMentha receiver, Michael Stiassny, says a rubber stamp from the Overseas Investment Office is virtually all that's required for the sale to go through.
“If the OIO says yes and we can finalise this agreement then this will happen,” he says.
Natural Dairy aims to export dairy products back to China, including infant formula and long-life milk.
Federated Farmers Dairy Chairman Lachlan McKenzie says the takeover will inevitably lead to a huge drop in New Zealand's income and standard of living.
“How are we going to sustain a first world living standard – our strategic assets is high calibre food and fibre production – the farmers in China are peasants,” he says.
The Chinese-based company told the Hong Kong stock exchange that the deal would be paid for in cash and through the issue of convertible bonds.
But business commentator Bernard Hickey is bringing into question the character of a key person involved in the deal.
Mr Hickey says May Wang, one of the main business people involved, owes hundreds of thousands to creditors after the failure of her property and hotel company, Dynasty Group.
“She’s already lost money for investors here in New Zealand and has a bunch of creditors on her tail,” he says.
“She is also likely to face charges from the company’s office next week in the district court.”
3 News
Watch this morning's interview with Fonterra’s chief executive Andrew Ferrier, as he talks to ASB Business about the Natural Dairy Holdings’ bid.
Listen to Bernard Hickey's full interview with Marcus Lush on RadioLIVE