Crafar sale to Chinese rejected, farms remain in limbo

Government ministers have rejected the $213 million sale of the Crafar farms to Chinese-backed interests, using their powers to rule the buyer, Natural Dairy, lacks “good character.”

Land Information Minister Maurice Williamson and acting Finance Minister Kate Wilkinson released their briefly worded decision late on Wednesday. It covers the applications by Natural Dairy (NZ) Holdings to acquire UBNZ Assets Holdings and 16 of the Crafar farms, all of which are in receivership.

The ministers also declined consent to UBNZ Assets Holdings’ retrospective application to acquire the four Crafar farms it bought in February 2010 from the receivers, Korda Mentha.

Criteria that had to be considered included the good character and the business background and acumen of the applicant. The Overseas Investment Office, which made the recommendation,said it wasn't satisfied that May Wang, who fronted the bid and has since been declared bankrupt, was of good character.

“We concur with the Overseas Investment Office’s recommendation that consent should be declined,” the ministers said.

The OIO also said the directors’ good character could be affected by Serious Fraud Office investigations into transactions associated with its applications for consent.

"The OIO considered that the charges Ms Wang currently faces and the possibility of further charges cast doubt on her good character. In addition, her reported conduct in the context of her bankruptcy proceeding raised further concerns," the decision said.

The decision comes as Ms Wang decided not to appeal against her bankruptcy ruling. She owed creditors $22 million following the collapse of her hotel and property business, Dynasty Group.

The Crafar portfolio – 13 dairy farms and three dry-stock grazing properties – covers nearly 8000ha in the central and western North Island. They were put into receivership in October 2009.

Their future remains in doubt and the receivers are continuing to take legal action to evict Crafar family members from three farmhouses at Reporoa in the Bay of Plenty.

In other developments:

• government-owned Landcorp has said it is not interested in making a new bid

• Natural Dairy says it is assessing its options

• The receivers are going back to "serious" unsuccessful bidders