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Court rejects Crafar farms appeal by Fay, Maori trusts

BUSINESSDESK: The Court of Appeal has turned down a bid by merchant banker Sir Michael Fay and two Maori trusts to stop the sale of 16 central North Island farms, saying it was satisfied with the general business acumen and experience of the Chinese buyer.

Justices Mark O'Regan, Terence Arnold and Douglas White dismissed the judicial review, saying Jiang Zhaobai's ability to bring himself from humble beginnings to become "a person of some stature in the Chinese commercial world" would satisfy the minister making the decision in approving the sale of the Crafar family farms.

"The information provided to the ministers was sufficient to enable them to determine that he and the other controlling individuals had generic business skills and acumen relevant to the Crafar farms investment," Justice Arnold said in delivering the judgment.

"We see nothing in the language, taken in context, to indicate that parliament had in mind that an investor must have any particular combination of the requisite skills and experience," the judgment said.

The judges were not swayed by the argument that Land Information Minister Maurice Williamson had not delved deeply enough into the success of Pengxin's agribusiness investments.

"The agribusiness experience was only one of the factors relied on by the ministers in concluding that the controlling individuals had the necessary business skills and acumen," the judgment said.

"While apparently important, it did not lead to a conclusion that was insupportable or unreasonable in the absence of that experience."

The judges said even if the ministers erred in accepting Pengxin's agribusiness investments, "it is unlikely that we would have exercised our discretion to grant a remedy".

That is because the ministers decided the foreign investment would have a substantial benefit to New Zealand, the deal has not been settled and creditors are still waiting on repayments, and that the farms are being operated by the receiver in a manner than presumably "involves minimal further investment".

The farms were tipped into receivership in 2009, and owed its bankers some $274 million as at April, the latest receiver's reports say.

Satisfied any concerns

Pengxin's proposal to enter into a joint venture with state-owned Landcorp Farming recognised their lack of specific experience in the dairy sector, and satisfied any concerns the minister might have had, the judgment said.

The legislation holds a tension between the parliament's description of overseas investment as a privilege against it giving foreign investors an entitlement to consent when they meet the act's criteria, the judges said.

The purchase of large blocks of farmland by foreigners became a topic of national debate after an aborted bid for the Crafar farms in 2010 by Hong Kong Exchange-listed Natural Dairy (NZ).

The government was pushing for looser controls on foreign investment, but ultimately did an about-face and imposed stricter processes amid rising opposition to the sale.

Sir Michael, who fronted the Crafar Farms Independent Purchaser Group, says he is disappointed with the decision, and that "the majority of New Zealanders have significant concerns about the issue".

Haride Peni, chairman of the Tiroa E and Te Hape B Trusts, says kiwi farmers will become disenfranchised with the system.

"It seems all you need to enjoy the privilege of owning New Zealand farm land is deeper pockets and some knowledge of business to become a major owner of dairy farms," he says.

Pengxin welcomed the decision, saying its "immediate priority is to begin the process of improving the farms, increasing production, and making sure we comply with all of the conditions imposed by the Overseas Investment Office”, according to a statement issued by spokesman Cedric Allan.

Comments and questions
25

Tossers tossed out.
Nothing surprising here, nor even news..

Cry me a river Mr Fay.

And there was me thinking my days as a melamine trader were over. Time to ramp up production again and change the infant formula stickers to "made in NZ". Thanks Court of Appeal

Common sense.

Should have matched the Chinese offer,instead of having a re-run of past bargains,in another time,in another place.Nuff said

Wonder how much legal costs are Mr Fay and his cronies liable.....

Fay and his tribe of drooling drongos were given short shrift. Good job!

Haride Peni and the Tiroa E and Te Hape B Trusts - here's a message for you and your tribes : "Byteaming up with that scumbag carpetbagger hypocrite non-tax resident Fay, you have shown your true stone age colors. You lot are worse than him.

"It seems all you need to enjoy the privilege of owning New Zealand farm land is deeper pockets and some knowledge of business to become a major owner of dairy farms," he says.

A bit rich coming from someone with his past .

Good news for the banks as well, having lent money in good faith to the earlier owners.

Time, Mr Fay, to bring out Mr Kerry Hoggard and his "Keep NZ Farms" campaigning again.

Oops - forgot that both of you settled millions of dollars over insider trading allegations.

Right upstanding NZ citizens you both are not.

Waaah! But I want to play with the cows! Waaaaah! <>

Shame on Mr " Rich White" for wasting our time and money , he would have sold them to some sucker down the line anyway .

Hopefully Fay and his Brown Ring mates will now understand ,that their combined stench is more than New Zealanders are willing to Stomach,

Hope they sock the spongers 10 million in court costs.

yep, that should be enough to get 'sir' michael feeling down the back of his couch.....

Be fair. Sir Michael in Swiss lederhosen handing out blankets, beads and muskets to his adoring tribesmen[newfound iwi mates] Such a patriot meaning Fay gets the farms and iwi gets the experience. Seen it before with his previous racketeering eh what? And what of his simpering daughter who can't sing in tune....got $ thousands from Radio on Air or some benevolent outfit wasting our money??

He probably thinks he was going to good for NZ, pity that as he had plenty of opportunity to do that years ago but chose to be selfserving instead

Good to see David Richwhite back in the news again: for some reason his presence in the Fay litigation had not been publicised. Now let's recall what those two can offer in business expertise- some trading in Kiwirail stocks? maybe break the Bank of New Zealand? - or is it the Iwi who have the business experience and the other two the farming? The Chinese sale will be an excellent promotion for NZ produce in one of the few corners of the world that has any money to trade with us, and I don't mean Switzerland either.

You might have got away with the Wine Box Mr Fay but you haven't got away with the Milk Vat.

It seems you rednecks have had your day again. Great, another TOW case on it's way soon i.e usual story , white man steals Maori land and flogs it off to the highest bidder who normally would not have a chance if not for white farmer run land corp coming to the rescue.

Maori are only following by your 150 year example. Thanks for that

Maori stole the land in the first place, its called Karma.

Amazing ! A Pakeha historian. I thought you all suffered from historical amnesia when having to face up to your shady colonial past and ethnic origin.

Pxss off, Mr Fay, back to your adopted native tax haven.

Lets not forget the great rewrite of history by selfserving Maori 'academics' (and a few misguided Pakeha academics)... There was no rule of law in preEuropean New Zealand. If you wanted a piece of land you fought the tribe that occupied (not owned) the land. If you won the fight , you could occupy that particular piece of land...(and got to eat your 'foes'), until you lost the next fight. Maori have no right to speak about have their land confiscated..there was no ownership!! That also applies to the lakes, rivers and foreshore...but of course these are inconvenient facts and are not helpful to the 'cause'.
Maori have yet again exposed their willingness to 'partner-up' to anyone likely to bring them any sort of gain....in this case a person/s of dubious character (and with far more intelligence) Without realising it, Maori were the pawns in a much larger game. Fay, you did exceptionally well out of the BNZ debacle and NZ Rail sale..why not just go to your 'happy place' and enjoy your illgotten gains away from the people you have wronged. That knighthood is so compromised with your name attached, you have 'lowered the bar' to new heights'.