NZ High Court blocks Chinese purchase of Crafar Dairy Farms

A New Zealand High Court decision has forced the NZ government to reconsider allowing a Chinese company to purchase a group of 16 dairy farms.

After offering NZ$210 million for Crafar Dairy Farms, the Shanghai Pengxin Group was given approval for the sale. But the High Court ruled that the application be reconsidered. In a media release, Land Information Minister Maurice Williamson and Associate Finance Minister Jonathan Coleman said that “the Court’s ruling calls for a different test to be applied to the economic factors in section 17 of the Overseas Investment Act than the Overseas Investment Office (OIO) had previously applied.”

“This ruling changes the interpretation of how the economic factors in section 17 should be assessed,” said Williamson. The legislation relates to the way the investment benefits New Zealand.

The OIO will reassess the application following the Court’s ruling and will submit a new recommendation to the Ministers.

Crafar Dairy Farms has been under the management of receivers KordaMentha since 2009, following the recession.

Local group, the Crafar Farms Purchase Group (CFPG), headed by businessman Sir Michael Fay, offered NZ$171.5 million for the farms but KordaMentha declined the offer. The High Court intervention comes as a result of a case filed by the CFPG.

The Ministers said they expected the OIO to respond within several days of the media release.