What is being done about four Crafar Farms bought by natural dairy without OIO consent?
The entirely predictable reaffirmation by the Government of its approval for Shanghai Pengxin to buy the Crafar Farms only involves 16 of them.
But the fact that has disappeared from the political and media spotlight is that there were 20 Crafar Farms for sale.
So what has happened to the other four? You never hear the Government mentioning them. It’s is too politically embarrassing.
Why? Because, in 2010, they were bought by Natural Dairy, the first Chinese would-be buyer of the Crafar Farms.
Remember Natural Dairy? At the time it was feted by the Government in exactly the same sort of terms as Shanghai Pengxin is now.
But it didn’t take much digging to establish that this company, fronted by May Wang, was a very dodgy outfit. So dodgy that the Overseas Investment Office (OIO) and the Ministers nominally in charge of foreign investment actually rejected the bid as not being in the national interest and because the people owning or controlling the company were deemed to be not of good character (as specified in the 2005 Overseas Investment Act). That was such a rare decision in New Zealand’s “come on in and help yourselves” foreign investment regime as to be almost unique. So you can rest assured that it must have been very shonky indeed to fail that test.
Mind you, nothing was done about any of these people not of good character. May Wang is among those facing serious charges in connection with the failed bid – but in Hong Kong, not New Zealand. That says a lot about our enforcement agencies.
But wait, there’s more. In 2010, before its bid had been decided upon, Natural Dairy went ahead and bought four of the Crafar Farms. When asked about this after its bid was rejected, the company said that it had done so in the expectation of retrospective consent from the OIO (which is standard operating procedure for that body, as it was for its predecessor, the Overseas Investment Commission).
Furthermore, Natural Dairy said that it had bought those four farms fair and square and has no intention of handing them back, possession being nine tenths of the law. Never mind minor legal details such as them having been explicitly denied official permission to do so.
So what has happened to get them back? You guessed it – nothing. The Campaign Against Foreign Control of Aotearoa (CAFCA) wrote to the OIO, under the Official Information Act, and asked if those four farms had been surrendered. We received a reply (23/4/12) saying:
“No. There are no provisions under the Overseas Investment Act 2005 that authorise the ‘surrender’ of assets, if the assets are acquired without consent. Under section 47 of the Overseas Investment Act, the High Court has a discretion to order disposal of property. However, the Court must first be satisfied that a person has contravened the Act or committed an offence under the Act. The Overseas Investment Office is considering a number of complex matters as part of our ongoing investigation into the four farms purchased by companies associated with May Wang. All information relating to the investigation is withheld under section 6(c) of the Official Information Act as its release would prejudice the maintenance of the law, including the prevention, investigation, and detection of offences, and the right to a fair trial”.
What a bloody joke! Here we have the most controversial foreign land purchase in recent history, involving a company whose bid was declined on grounds of lack of good character. This outfit blithely went ahead and bought four of the farms without waiting for official permission (which was declined) and then says “catch us if you can”.
The Overseas Investment Act is an ass and so is the so called “oversight and enforcement” regime. The OIO can’t even muster the energy to throw its rubber stamp at Natural Dairy, let alone throw the book at it.
So this is what has happened with the first lot of Crafar Farms sold to a Chinese buyer. Why should we put any faith in the “strict conditions”, etc, that the Government trumpets in connection with this latest sale of Crafar Farms to another Chinese corporate buyer? Because, if anything goes wrong, neither the Government nor the OIO will do anything about it. Let’s hear from the Prime Minister, and the other Ministers responsible for foreign investment policy, what the Government intends to do about this and how soon.
The OIO’s letter to CAFCA refers to “complex matters”. There’s nothing terribly complex about this. Natural Dairy bought four farms that they didn’t have permission to buy. Cancel those sales and strip Natural Dairy of their ownership.