Fay consortium lodges court proceedings seeking OIO papers

Tuesday 24th January 2012

The consortium of investors led by investment banker Michael Fay to mount a rival bid for the Crafar family farms has lodged proceedings in the Welllington High Court to get a copy of the Overseas Investment Office’s recommendation on whether Chinese interests can buy the land.

The so-called Crafar Farms Purchase Group filed the papers this afternoon in the High Court in Wellington seeking access to the OIO recommendation on whether Shanghai Pengxin Corporation should be allowed to buy the 16 farms or not.

The group wants to fast-track its application, and wants it completed before a deadline for the sale to be completed on Jan. 31.

“Our concern is that there has been no transparency around the OIO’s involvement in this matter so far and that appears unlikely to change, forcing us to launch litigation this morning,” Alan McDonald, a spokesman for the purchase group, said in a statement.

A first hearing on the application is expected Thursday morning.

“There is a very real risk that a final decision could be made without anyone receiving the information needed to launch an effective judicial review, and there is therefore a very strong public interest in the OIO recommendation being made available,” he said.

The Fay-led consortium, including Tiroa E and Te Hape B Trusts, Tauhara Hapu Trusts, Aitchison Farms, WD Holmes 2000 Trust, Donovan Group and Brent Cook launched a rival $171.5 million offer in September, believed to be some $30 million below Pengxin’s bid.

KordaMentha, the farms’ receiver, imposed a Jan. 31 deadline for the Pengxin offer to become unconditional after an earlier Chinese bid fell through last year when it was turned down by the OIO, which judged some parties to the deal fell short of the ‘good character’ test.

The OIO’s recommendation is with Land Information Minister Maurice Williamson, according to National Business Review reports, and McDonald says with a fast-tracked judicial review, a final decision could be made this week.

If Pengxin’s bid falls through and the purchase group is successful in its bid, the New Zealand group will split the farms among the group so each farm will be owner-operated by an experienced dairy farmer.

The purchase of large blocks of farmland by foreigners has been in the government’s sights after the Natural Dairy deal for the Crafar farms emerged in 2010, prompting the government to review foreign investment rules and ultimately impose stricter controls.

(BusinessDesk)

BusinessDesk.co.nz

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