Good-character spotlight on PGG owner
The Overseas Investment Office (OIO) is investigating whether Agria Corporation, the Chinese company that half-owns Kiwi produce company PGG Wrightson (PGW), is of ‘‘good character’’.
If it is declared not to be of good character, its 50.22 per cent stake in PGW could be under question.
Individuals or companies rarely fail the test.
Last year United States investor Charles Banks, who headed the buyout of Hawke’s Bay’s Trinity Hill winery and was sentenced to four years in prison for fraud, was stripped of his rights as an investor. The OIO confirmed that Banks was the only person or company who had ever failed the test, but said it was not able to comment on matters that were under either surveillance or investigation.
In 2016 Agria was delisted from the New York Stock Exchange (NYSE) after the exchange said it had allegedly uncovered evidence that a ‘‘top executive and other intermediaries’’ had artificially inflated the company’s stock price.
While Agria initially said it would fight the delisting, it later changed tack, with chief executive Alan Lai floating the possibility of it relisting elsewhere.
The Campaign Against Foreign Control of Aotearoa said it had asked the OIO 13 months ago to investigate.
In July last year, in an out-ofcourt settlement, Agria agreed to pay US$1.3 million to shareholders who threatened a class action over the fall in value of their shares.
The Campaign Against Foreign Control of Aotearoa (CAFCA) said it had asked the OIO 13 months ago to investigate whether Agria was of ‘‘good character’’, which is one of the requirements for foreigners or foreign companies investing in New Zealand.
This week the OIO confirmed it was investigating Agria given: its NYSE delisting; Agria’s public statements that it had received subpoenas from the US Securities and Exchange Commission; and allegations made against Agria and some of its directors in related class-action lawsuits.
A PGW spokeswoman said independent directors had considered the implications, if any, that the matters might have for PGW. They would update the market if there were any material developments that might require consideration by shareholders.
An Agria spokesman said the company had always made full disclosure to the OIO and would assist it fully with any inquiries.
Agria was founded in 2004 by Alan Lai, the chairman of both Agria and PGW. There are four Agria directors on the PGW board.
It is registered in the Cayman Islands for tax purposes and its major asset is PGW, which had an annual turnover last year of $1.13 billion and employed 2200 staff.