Chinese UDC bid vetoed

The Overseas Investment Office (OIO) has turned down an application from China’s HNA Group to buy asset finance company UDC Finance.

UDC’s owner, ANZ, made the announcement to the New Zealand stock exchange yesterday.

The OIO said it could not determine who the ‘‘relevant overseas person’’ intending to make the purchase was from the information provided.

This meant the test in section 18 of the Overseas Investment Act, which covers whether a person is of good character, was not met.

‘‘While the sale agreement between the parties remains in place, unless HNA successfully overturns the OIO decision, the sale will not proceed,’’ ANZ chief executive David Hisco said.

‘‘We don’t know if HNA will attempt to overturn the decision.’’

HNA said in a statement: ‘‘We are disappointed by the OIO’s decision and find it inconsistent with the views of other regulators around the world that have recently issued approvals to HNA and other Chinese investors.

‘‘The current political environment in New Zealand relative to foreign investment will play a significant role in our determination of next steps.’’

The Prime Minister’s office declined to comment, saying the matter had been delegated to OIO.

HNA can ask the High Court to review the decision but has not said if it will do so.

In July, Winston Peters, now Deputy Prime Minister, said the OIO should reject the deal.

‘‘HNA Group is less a ‘House of Cards’ and more a ‘House of Renminbi’,’’ Peters said then, adding that the group’s ownership made a Byzantine maze look like child’s play.

‘‘This company is convoluted, enigmatic and so indebted that the OIO must pull the plug.’’

ANZ announced plans in January to sell UDC for $660 million to the Chinese conglomerate, which isa Fortune Global 500 company.

Hisco said then that sale was a strategic move so the bank could focus on its core activities.

Founded in 1993, HNA Group started as a regional airline and grew into a global company with more than US$90 billion (NZ$128 billion) in assets, US$30b in annual revenue and almost 200,000 staff.

The financial arm of the company operated China’s largest nonbank leasing company and one of the world’s largest container leasing businesses.

Yesterday, following the OIO decision, Hisco said: ‘‘If the sale does not proceed, we’ll assess our strategic options regarding the future of UDC. It’s a great business and there is no immediate requirement to do anything, particularly given the strength of ANZ’s capital position.’’

He said it would be business as usual for staff and customers.