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An aerial view of one of the Crafar farms - Source: ONE News -
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Michael Fay, the investment banker who played both sides of state asset sales in the 1980s and 1990s, says Landcorp's involvement with a Chinese bidder for the Crafar family farms has 'kneecapped' his rival bid.
NBR RichList entrant Fay says state-owned Landcorp is creating a conflict of interest with North Island farmers if it proceeds with negotiations with Chinese investor Shanghai Pengxin.
"Landcorp is effectively helping to shut out a New Zealand bid, competing against our own dairy farmers and flying in the face of public opinion polling that shows 80 percent of New Zealanders want the government to step in and stop the sale of the Crafar farms to foreign buyers," Fay said in a statement.
"Clearly in this case it is direct conflict with the interests of the Central North Island farming community and the New Zealand public in general," he said.
Landcorp has been tipped to manage the 16 farms if Shanghai Pengxin gets Overseas Investment Office approval to buy the land.
The Chinese company has been waiting almost nine months for an answer to its application to buy the farms, in a deal that will involve it spending at least $200 million to buy and invest in the land, some $30 million more than the rival Fay-led offer.
Fay and a syndicate of local iwi and farmers lodged a $171.5 million bid for the Crafar family farms in September, as a back-up to a rival offer from Shanghai Pengxin being turned down by the OIO.
The purchase of large blocks of farmland by foreigners has been in the government's sights after the Natural Dairy deal for the Crafar farms emerged last year, prompting the government to review foreign investment rules and ultimately impose stricter controls.
Fay and investment banking partner David Richwhite have a history as both advisers on and investors in state asset privatisations, including Telecom and New Zealand Rail.
Fay and Richwhite's sell-down of its stake in NZ Rail, subsequently TranzRail, led to accusations of insider trading by the then-Securities Commission, and led to a $20 million settlement involving several parties, with the regulator.
