New legal bid to stop Chinese firm buying New Zealand farms

WELLINGTON - A consortium of New Zealand interests that took legal action to overturn the government's approval of the sale of 16 North Island dairy farms to a Chinese company is taking fresh legal action to stop the deal.

Sir Michael Fay, who heads the Crafar Farms Independent Purchasers Group (CFIPG), lodged its appeal in the High Court at Wellington on Thursday against a ruling by the High Court in February that prospective buyer Shanghai Pengxin had the necessary business acumen to run a dairy farm business, Radio New Zealand reported Friday.

In the same ruling, the High Court put aside the government's original approval for the sale and asked the Overseas Investment Office to reconsider its recommendation based on new criteria for the benefits of foreign ownership.

Last week, the government announced it would again approve the Shanghai Pengxin deal based on a new recommendation from the OIO.

The CFIPG, which includes indigenous Maori interests, also lodged an appeal in February with the Court of Appeal.

Radio New Zealand reported a CFIPG spokesperson saying the group was determined to take any practical way to stop the sale.

The new appeal to the High Court covered the same ground as the first, which was that the Shanghai Pengxin bid failed the test of relevant business experience and acumen, said the report.

The farming industry association, Federated Farmers, claimed another legal challenge would further discourage overseas investment in New Zealand, said the report.

Federated Farmers chairperson Bruce Wills said other foreign investors would not want to be caught up in similar protracted legal action and could be put off investing in New Zealand businesses.

A New Zealand spokesperson for Shanghai Pengxin told Radio New Zealand the CFIPG was grasping at straws.

Cedric Allen said the company already owned several large farms overseas and more than met the requirements of New Zealand's Overseas Investment Act.

Last week, the head of a Maori trust that was part of CFIPG told Xinhua that he was still willing to talk to Shanghai Pengxin about a deal to reclaim three of the farms that Maori groups say are Maori land that the government wrongly appropriated in generations past.

Hardie Peni, executive chairman of the Tiroa Te Hape Trust, said the government approval of the sale had denied his tribe an opportunity to reclaim ancestral land.

He and his iwi (Maori tribal group) still hoped to negotiate with Shanghai Pengxin Group over a fair price for two of the farms Bennydale 1 and Bennydale 2 in the central North Island even if Shanghai Pengxin eventually took ownership.

A third farm in the group had a claim by another iwi, Tuwharetoa, who were "quite keen to be given the chance to buy back their ancestral whenua (land)," Peni said.

In February, the High Court in Wellington upheld the CFIPG argument that New Zealand's Overseas Investment Office (OIO) had failed to properly consider the benefits a foreign buyer would bring to the farms, and the court set aside the OIO's recommendation to the government.

However, it rejected the CFIPG argument that Shanghai Pengxin failed to have the appropriate business expertise and experience to operate New Zealand dairy farms.

Shanghai Pengxin first submitted its reported bid of NZ$210 million ($170.86 million) to the OIO on April 13 last year, before the rival CFIPG offer of NZ$171.5 million was put to the receivers.

After reconsideration by the OIO, the government said last week that it had approved the bid by Milk New Zealand Holdings Limited (Milk New Zealand), a subsidiary of Shanghai Pengxin.