Sir Michael Fay's consortium is still pushing for a judicial review to try to stop the Crafar farms being sold to a Chinese company, despite today's Government approval for the deal.
Land Information Minister Maurice Williamson and Associate Finance Minister Jonathan Coleman announced today they have accepted the recommendation of the Overseas Investment Office to grant consent to Milk New Zealand Holding Limited, a subsidiary of Shanghai Pengxin to buy the 16 farms.
The bid is said to be worth some $210 million and will see the state-owned Landcorp running the farms in the central North Island, which are in receivership.
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Williamson said the bid has met all the OIO criteria, including the "good character" test that previous bidder Natural Dairy, failed last year.
'Open season' for foreign buyers
The Crafar Farms Purchase Group consisting of Auckland businessman, Sir Michael Fay, Central North Island farmers and iwi groups said the ministers' decision is wrong in law and if not overturned by Judicial Review sets up "open season" for any foreign buyers wanting New Zealand land.
The group said it would divide the farms among its members if its bid was successful.
It said it is the highest New Zealand bidder for the farms with a $171.5 million offer, which is $21.5 million more than the Government's farming enterprise, Landcorp.
The receivers, KordaMentha, rejected the Fay group's bid in late 2010, saying it was not their best offer.
What happens now?
Sir Michael Fay said the group had no choice but to seek a judicial review of the ministers' decision.
The Judicial Review claim was filed in the Wellington High Court last Tuesday and is expected to proceed next week in front of Justice Miller.
But agri-journalist and close follower of the Crafar farms saga, Richard Rennie says Fay may have tripped himself up by putting in his bid too late.
Rennie said the OIO has done a thorough job.
"It seems to be fairly widespread. They haven't just thrown the
keys at them and said 'go for it guys.'"
According to the Government, in the past two years 360,000 hectares of agricultural land has been cleared by the OIO for sale to foreign investors. But, only 800 hectares, or 0.2% went to China.
"We're talking tens of thousands of hectares bought by the Italians, the Germans, even the Brits and Americans. And yet we haven't heard a murmur from anyone in New Zealand about that," Rennie said.
'Kick in the guts for Kiwi farmers'
Meanwhile, Labour Leader David Shearer says the Government's
decision to allow the Crafar Farms to fall into foreign hands opens
the way for more New Zealanders to become tenants in their own
land.
"We cannot sell our way to a brighter future, yet this Government
seems determined to do exactly that," Shearer said.
Shearer said Pengxin group has no background in farm management.
Landcorp, the New Zealand State Owned Enterprise which itself
made a bid to buy the farms, will now be paying a Chinese
Government-backed company a touted $18 million a year to rent and
manage the farms for it, he said.
Hurdles to jump
Federated Farmers says the Shanghai Pengxin Group's approval to buy the farms still has to meet a January 31 deadline set by the receivers for the sale to go unconditional, as well as facing the potential Judicial Review sought by the Fay consortium.
Federated Farmers President Bruce Wills said whether it is possible for the sale deadline to be met rests with the courts given the Fay-led group has filed papers in the High Court for a Judicial Review.
Wills said Overseas Investment Office rules must be applied without fear or favour.
The receivership of the farms has raised questions from farmers about the way insolvency is managed, Wills said.
Since December 2009, 150 dairy farms have been sold nationwide
with most likely to have been sold to Kiwis, he said. In the
three-months to December 2011, 16 dairy farms were sold in Waikato
and the Bay of Plenty alone.
