Shanghai Pengxin knocked back on massive Australian farm purchase

Australian Treasurer Scott Morrison announced this afternoon he was making a "preliminary decision" to block the proposed A$371 million sale of the S. Kidman & Co cattle empire.

Already locked out of a major farm and forestry purchase in New Zealand last year, an Australian arm of the Chinese Shanghai Pengxin global conglomerate has today been told it can't buy one of Australia's largest farms, covering around 1 percent of the continent's total area.

Australian Treasurer Scott Morrison announced this afternoon he was making a "preliminary decision" to block the proposed A$371 million sale of the S. Kidman & Co cattle empire, to a Chinese-led consortium, citing national interest concerns.

New Zealand's Associate Finance Minister Paula Bennett and Land Information Minister Louise Upston last September rejected a recommendation from the Overseas Investment Office to allow the Chinese company to purchase the central North Island Lochinver station from the Stevenson Group for $88 million.

Shanghai Pengxin began and subsequently dropped a court challenge to the decision and had been expecting an approval for the Australian purchase from the Australian OIO-equivalent, the Foreign Investment Review Board. That followed it cutting out two sizeable properties after Morrison rejected an earlier, larger offer last November.

"Even after the excision of Anna Creek and The Peake properties, Kidman will still be Australia's largest private land owner and hold over 1 percent of Australia's total land area and 2 percent of Australia's agricultural land," Morrison said. "Given the size and significance of the Kidman portfolio, I am concerned that the acquisition of an 80 per cent interest in S. Kidman & Co Limited by Dakang Australia Holdings Pty Ltd may be contrary to the national interest."

Dakang Australia is 51 percent owned by Dakang Pasture Farming and 49 per cent owned by Shanghai CRED Real Estate Stock Co. Dakang was to have acquired 80 percent and Australian Rural Capital 20 percent under the blocked deal.

Dakang Pasture Farming is listed on the Shenzhen stock exchange and is 55 percent-owned by Shanghai Pengxin Group, whose former chief executive in New Zealand, Gary Romano, was also deeply involved in the Kidman bid.

(BusinessDesk)