Govt rejects Chinese bid for Lochinver
ment of the former Crafar farms to new historical levels.
‘‘We are surprised and extremely disappointed with the decision and will be considering our options.’’
Shanghai Pengxin, 99 per cent owned by Chinese rich-lister Jiang Zhaobai, had a conditional agreement to buy the station for $88m from owner Stevenson Group. The sale of the 13,800-hectare sheep and cattle station was understood to have been rejected by the Government for not creating enough extra jobs.
The station, which is valued at more than $70m, would have been one of the biggest foreign acquisitions of New Zealand land. It employs 22 workers.
Lochinver had been owned by the engineering, mining and quarrying firm Stevenson Group for more than 50 years, but the company wanted to use proceeds from the sale to invest in its large quarry operations in Drury, near Auckland.
Stevenson Group had expected to create more than 8000 jobs during the 15-year project. Chief executive Mark Franklin said in a statement that he was disappointed with the outcome.
‘‘At this stage I am not sure we agree with the assumptions used or the way the criteria has been applied,’’ he said.
‘‘We are concerned that this process has taken 14 months with the end result that we have been deprived of our property rights to sell to the highest value bidder for some vague national benefit which has not been defined.’’
He said he felt it was unclear as to why Lochinver Station farm was any different to others that have been approved, given the benefits to both the farm and to Stevenson Group.
Shanghai Pengxin had planned to sell its New Zealand farm assets, which include the former Crafar dairy farms, into an offshore partially owned, listed company called Hunan Dakang.
Dakang would have Chinese retail investors and would seek to purchase those New Zealand farm assets. The aim was to create more investment capital for Shanghai Pengxin, which also was interested in beef, property development and other interests in New Zealand.
Federated Farmers president Dr William Rolleston said the decision gave a message to those purchasing farmland that substantial economic benefits needed to be seen: ‘‘This clearly doesn’t meet the tests.’’
The federation welcomed foreign investment, but as foreign investments became more significant, decisions like this helped draw a line as to where the test level was, Rolleston said. He was surprised with the OIO’s statement, which called the question of whether the benefits of the potential investment to New Zealand are or could be substantial and identifiable as ‘‘finely balanced’’.
‘‘I would have expected that for purchases of this size, that the substantial benefit would be in the realms of bringing new technology to New Zealand that we don’t already have or some degree of market penetration would have given us increased access to markets that Shanghai Pengxin have,’’ Rolleston said.
‘‘It doesn’t look like either of those things were included in the application and therefore I’m surprised it said it was finely balanced.’’
Rolleston doubted the decision would put foreign investors off New Zealand. Bennett said while the Government recognised and supported overseas investment, it was a privilege for overseas people to own sensitive New Zealand assets and such investments had to meet statutory criteria for consent.
Land Information Minister Louise Upston said she and Bennett agreed parts of the proposed investment could benefit New Zealand, but on the overall balance of evidence, the benefits would not be substantial and identifiable.
‘‘This is an example of our system working well,’’ Upston said. ‘‘The OIO conducted a thorough investigation before making a finely balanced recommendation. Ministers carefully assessed the evidence and ultimately came to different view.’’
Waikato University professor of agribusiness Jacqueline Rowarth supported a rejection of the Lochinver sale. ‘‘They have got a point. What would they be doing that would be different from what is already being done?’’
Labour finance spokesman Grant Robertson said the decision to block the sale was the right call. ‘‘It’s unfortunate that other sales without similar attention are being waived through,’’ he said.