The High Court's decision to review the Government's sale of the Crafar farms has sparked concern over foreign investment in New Zealand.
Experts say the back-tracking of the sale makes New Zealand look like a difficult place to invest in.
Business NZ chief executive Phil O'Reilly said the decision will not only impact investors in China, but other markets as well.
-
Related
"This is about overseas investors coming to New Zealand, in any investment really, and thinking, 'gee, is New Zealand really serious about being open for business?"
Others said the decision could be seen as racist.
"It makes New Zealand look as if it is racially selective in the investors it welcomes into the country," said investment consultant David Mahon.
Prime Minister John Key said the decision will now change advice on all future foreign investment.
"This is going to be a whole new way of every foreign purchaser having to be considered and the merits on if they will be accepted or not."
The Overseas Investment Office is likely to resubmit its recommendations to the Government within the next few days.
Government 'intended' sale of farms all along
Labour leader David Shearer said this morning the Government misled politicians over the sale of the Crafar farms in a bid to ensure it was pushed through.
Chinese bidder Shanghai Pengxin had been given Government approval to buy the 16 farms for a reported $210 million last month.
But, the High Court in Wellington has ordered a review of the decision after a challenge was made by rival bidders Crafar Farms Purchase Group, led by Sir Michael Fay and including local farmers and iwi groups.
Shearer told TV ONE's Breakfast the Government had always intended to sell the land despite evidence that it was not the right decision for New Zealand.
"It's always been argued that the ministers had no option but to sell these farms off," he said.
"But the judge has come back in one and a half weeks and said actually ministers should not have sold the farms off, and that's the guts of the ruling."
Green Party co-leader Russel Norman has raised questions about a meeting involving Overseas Investment Office officials and a Chinese diplomat last year before the election.
"We now have good evidence that the Chinese Government visited the Overseas Investment Office, we assume why they visited then was to lobby about the deal."
Shearer said the Government had waited until after the election to sign the approval because it knew it could be challenged and wanted to avoid embarrassment.
"The Government's handling of this process has been absolutely
shambolic," Shearer said.
Latest NZ News Video
-
ONE News Minute 9am update: May 26 (1:00)
-
Kids cough up $14m for Government (1:50)
-
Education ministry 'barbaric' (1:55)
