Brothers in pollution case may have to sell station
The Overseas Investment Office has put the Argentinian buyers of Taranaki’s Onetai Station ‘‘on notice’’ by issuing them two formal warnings.
The OIO said businessmen brothers Rafael and Federico Grozovsky could be forced to sell the property, if they and an Argentinian company they directed, Magromer, were convicted of a pollution offence in Argentina.
The sale of Onetai Station became the centre of a controversy this year, when it emerged that the farm had been bought through a Panamanian trust, Ceol & Muir, that had been set up with the help of ‘‘Panama Papers’’ law firm Mossack Fonseca.
Labour MP David Cunliffe then revealed a pollution allegation against the brothers and after the OIO accepted it could not independently verify they had full ownership of Ceol & Muir.
OIO deputy chief executive Lesley Haines acknowledged the OIO had been aware from its own investigations that the Magromer tannery was facing charges when it recommended Ceol & Muir be allowed to buy the farm in 2013.
The department did not pass on that information to ministers who made the final decision on the sale.
Haines said Ceol & Muir should nevertheless have told the OIO about the prosecution, stating in its warning that it was a ‘‘significant omission’’.
‘‘We have put Ceol & Muir on notice by giving them a formal warning about the need to provide us with complete and accurate information,’’ she said.
‘‘If the Grozovsky brothers are found guilty, we will consider the outcome and they could be made to sell Onetai Station,’’ she said.
Haines did not expect the Magromer case to go to a full hearing in Argentina until next year at the earliest.
The Grozovsky brothers said in a statement issued by law firm Kensington Swan that the prosecution ‘‘lacked any foundation’’ and they were confident they would not be convicted of any offence.
They accepted the warnings on ‘‘minor matters’’.
They also noted the review cleared them of any involvement in an air pollution incident from a sugar mill owned by a business they had previously sold, about which Cunliffe had also made allegations under parliamentary privilege.
Kensington Swan chairman Gerald Fitzgerald said in July that the brothers had taken exception to the way they had been portrayed by Cunliffe.
Neither the brothers nor Magromer had been convicted in relation to the alleged pollution of Argentina’s Lujan river and nor had the Grozovsky brothers been ‘‘convicted of any criminal offence in any jurisdiction’’, he said.