Fay files legal action over Crafar OIO process, ministers served
UPDATE: The Michael Fay-fronted low-ball bidder for the Crafar farms group has confirmed the launch of legal proceedings to prevent the sale of the dairy empire to China-based Shanghai Pengxin.
The first hearing in the action would be on Thursday morning at the High Court in Wellington before Justice Forrie Miller.
Alan MacDonald, a spokesperson for the Fay group said in a statement: "Our concern is that there has been no transparency around the OIO's involvement in this matter so far and that appears unlikely to change, forcing us to launch litigation this morning."
Mr MacDonald said the action was being launched now - before a formal decision had been announced by ministers - to ensure the challenge occurred before settlement.
"There is a very real risk that a final decision could be made without anyone receiving the information needed to launch an effective judicial review, and there is therefore a very strong public interest in the OIO recommendation being made available," he said.
Mr MacDonald said the Fay-fronted group believed the OIO had recommended the farms be sold to Pengxin, and any judicial review of the OIO's recommendation or ministerial decisions should be completed before KordaMentha's 31 January deadline.
The Fay-fronted group includes a number of businesspeople in its consortium, including iwi, with each party proposing to by a few farms each.
The group has employed Alan Galbraith QC, and Bell Gully, to represent them in their action.
The Michael Fay-fronted consortium trying to buy the Crafar farms has filed an application for judicial review of the Overseas Investment Office. The legal challenge concerns the OIO's handling of the proposed purchase of the farming group by the China-based Shanghai Pengxin.
The National Business Review understands several officials, including Land Information Minister Maurice Williamson and Associate Minister of Finance Jonathan Coleman, were this afternoon served with the proceedings filed in the High Court in Wellington.
The proceedings also name the chief executive of Land Information New Zealand. The two ministers are tasked with acting on the OIO recommendation.
The OIO has made a recommendation to the government on the Pengxin bid – but ministers are staying mum. A spokeswoman for Mr Williamson confirmed he was in receipt of the OIO decision.
"That is the case, he does have the OIO recommendation – but we’re not making any more comment," she told NBR.
Mr Williamson's spokeswoman declined to comment on the judicial review application.
This afternoon's developments indicate an end to the long-running Crafar farms saga could be near.
The dairy farming group collapsed in 2009 and an attempt by receivers to sell the farms to another Chinese firm was scuttled when its frontwoman, May Wang, was bankrupted and charges of corruption and money-laundering were laid against the bid's principals in Hong Kong.
Foreign interest in the farming group has catalysed popular dissatisfaction with overseas investment in New Zealand land holdings and played a key role in the recent election campaign.
The group fronted by Mr Fay had indicated legal action was likely if the Pengxin bid was approved.
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Comments and questions29
I had a dream - BNZ, Railways etc. Now farms. Yep, giving money back. Get in behind!
If he wants the farms so badly why doesnt he just stump up and pay what they are worth? Guess he is just used to getting everything for nothing?
JJ & AB be reasonable; how can a huge tax free profit be extracted if you pay a realistic price for an asset?
honestly, you'd think this geriatric 'merchant -banker' would just retire quietly now that he's got his gold card and free ferry trips to the island....
Ironic that the OIO does not get to do a character assessment of Crafar, May Wang or Fay - all of whom are New Zealanders.
A tax free profit? How do you do that?
Join the Herd Scheme - it is reponsible for millions of dollars of tax free profit having been enjoyed by farmers who have been canny enough (and/or who have had competent financial advice) to exploit it since its introduction 20 odd years ago. However in this instance I suspect that Mr Atkinson is referring to the potential for capital gain, which may or may not be argued as being "profit" depending on whether one is speaking in economic terms or revenue and expenditure terms.
On watching the 'Campbell Live' expose on Monday 23 January it was noted that a Mr. Bruce Aitchison of Morrinsville (labelled as Taupo by TV3) was interviewed as a member of the Fay consortium. It may be regarded as being of interest that Mr. Aitchison is a major player in the trading and farming of export dairy heifers for the Chinese market.
Mr. Aitchison has reputedly turned down offers from New Zealand farmers wishing to purchase said heifers as they were not offering a price as high as his 'Imperial Enemies'.
A reverse 'deja vu' experience for Mr. Aitchison perhaps, or perhaps opportunism.
As Mr. Aitchison has been know to say on many occasions " you've missed out, you haven't got enough money son".
Karma without sutra perhaps?
Re the Fay lowball offer. On searching the Companies Office register there appears to be no registration of the creditors of the Crafar properties as a charitable trust. Perhaps this has been overlooked inadvertently?
They 'FayWay' offer and tactics reek of xenophobic extortion for the fiscal benefit of needy and the greedy.
What a nauseating spectacle.
Makes hundreds of millions at the expense of the NZ taxpayer, flees to a tax haven and now plays the patriot card.
What is absolutely "transparent" is that Fay has submitted a bid that is not competitive. I agree with Parnell - let's have a "character assessment" of this creep.
The UK government is looking to rescind Fred Goodwin's knighthood - IMHO "Sir" Michael should receive the same treatment.
This parasite should p*** off back to Switzerland and take his stooges with him
You are all being paranoic pricks. As NZ citizens, Michael Fay and his consortium have every right to bid for the Cafar farms, as do any other bidders in the world. The issue for the Govt is whether to sell to a Chinese controlled consortium or one in which Michael Fay is involved.
This whole spectacle will play very badly for those currently considering inward investment for NZ. Either it is an open economy that encourages foreign investment or it isn't. In any event, Fay's claim to represent the national interest just doesn't measure up: profits wil either go to China or to Switzerland. Fortunately I suspect the prospects of success of this JR are low.
Yes, Mr Fay and his consortium have every right to bid - but not at using every dirty tricks in the book to get the farms $30m cheaper.
And the dirtiest trick of all is to use the patriotic card - because he is a tax exile living most of his time overseas so that he does not have to pay proper tax on his earnings from the ill-gotten gains he made selling NZ assets in the past to overseas buyers.
BTW, Mr Fergusson - do you still believe Dr Brash did the right thing maintaining high interest rates during the Asian financial crisis?
Ah, seems like it's okay to borrow billions from overseas to go on holidays, buy cars, load up on imported goods and in the process, exploit the working classes of the third world.
But when it comes to paying the money back, it's all somebody else's fault?
Well posted Mr Ferguson, let the courts decide.
"Paranoiac pricks". I just love that. Describes these vindictive losers to a T.
I personally believe the Chinese bid is inflated, deliberately as a "sweetener'.
In my language a "bribe" to gain a foothold in NZ.
It'll be interesting to see if the Gov. is sucked in.
BUT, I could be wrong and if I am, my apology to the Chinese bidders.
Well posted indeed, Mr Fergusson!
Very telling comments given Mr Fergusson's track record and his "antics" at Magnum Corp, and who supported Mr Brash in maintaining high interest rates during the Asian financial crisis.
The very policies which sent NZ into a double dip recession (only economy in OECD to do so) and bankrupted so many farmers and businesses - allowing overseas investors to mop up assets in NZ cheap.
Good one!
Dear Mr. Fergusson,
Indeed this country is purported to be a deregulated democracy. If the 'FayWay' consortium is so patriotic then perhaps they should up the ante and out bid the Chinese offer. Is this not how business normally operates?
The move by the current Government to regulate Fonterra's raw milk prices is perhaps a move toward the regulatory climate of socialist policies inflicted on this country in the first 150 years of this small, boutique nation's existence?
Perhaps the Oligarch of Great Mercury knows something we shouldn't.
Well said LOL.
Sounds like Mr Fergusson is a Fay boy from wayback.
I don't see how objecting to the nauseating conduct of "Sir" Michael makes me a "vindictive loser". Perhaps Mr Morrison (another Fay boy?) can explain.
And if the Chinese want to submit an "inflated bid" - why shouldn't they? How is that worse than the low tricks and chicanery of the Fay team?
Patriotism is the last refuge of a scoundrel.
How does Mr Fay know so much about what has been happening with the Pengxin OIO application?
Has someone been leaking sensitive information to him?
Time for an investigation.
Insider trading now is both a criminal and civil offence?
I do not know "Fay", I do not know the "Chinese bidders.
But I can recognise hypocrisy!
You say ,"the Chinese want to submit an "inflated bid" - why shouldn't they?"
I agree
So why all the vindictive paranoiac hand wringing when someone puts in a low bid?
I don't have any issues with "Sir" Michael's low ball bid - it's the shabby tactics and sudden display of patriotism from our noble, tax-dodging knight that disgusts me and quite a few others. I don't see how that is vindictive or paranoid.
Many people think this guy is no more than a dodgy spiv and asset stripper who has enriched himself at the NZ taxpayers' expense then run off with his ill-gotten gains, pausing only to give the finger to the NZ taxman and population. I couldn't possibly comment.
PS I don't remember a lot of "transparency" around the NZ rail and BNZ deals.
Shameless, very well stated.
Massive kudos to Fay and his group in their attempt to wrest control of such valuable NEW ZEALAND assets into of local hands rather than CHINESE.
I think this fact is getting lost somewhere in this forum (seems to happen a bit in these NBR comment threads, why is that? hmmm).
Lets remember a few things...
- Fay is part of an NZ group who will each "settle" individual farms within the Crafar 16. ie Fay is by no means gaining control of the Crafar empire with a click of his fingers.
- The groups tactics, whilst agressive, are legal and above board. Maybe New Zealand business can learn a thing or two here, the Australians know it already.
- The groups offer is widely considered 'fair' price for the land which would indicate, as a previous poster mentioned... The Chinese offer is at a premium as a sweetener to the NZ govt.
The Campbell Live poll last night was very telling as to the countries opinion and lets not lose sight of that in this forum.
Fay, and of course the other New Zealanders in the group are white knights in my book and I would buy each of them a beer any day of the week.
Dear Supporter,
One would be most surprised if Mr. Fay consumed beer.
Why might one be surprised by that?
Thank you supporter for your eloquent and well articulated statement about keeping valuable NZ asset in NZ hands.
I assume then that you will be talking to Sir Michael about BNZ being sold by him to overseas interests? And Telecom? And TranzRail?
They are VALUABLE NZ assets too, right?
And of course, you will be talking with him about him spending most of his time in NZ and paying NZ taxes?
You are a hero, matey. Let me know how you go and I will shout you a glass of champagne anytime.
Most opinions don't want to sell the Chines and don't want a New Zealand syndicate to buy if Sir Michael Fay is involved. I don't see any other New Zealand group waving a cheque for $200 million
Deal approved.
CHINA WINS.
Better get used to it.
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