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Cabinet ministers Maurice Williamson and Kate Wilkinson today declined consent for the Chinese-backed bid to buy up one of the nation's biggest dairy farming operations, the 16 farms owned by members of the financially-troubled Crafar family.
Natural Dairy (NZ) Holdings Ltd applied to buy the Crafar farms _- which were valued at $206 million before the four companies owning them were put into receivership - through a New Zealand front company, UBNZ.
Overseas Investment Office (OIO) manager Annelies McClure said the ministers concurred with the OIO's recommendation that consent should be declined.
"One of the criteria for consent (under the Overseas Investment Act 2005), is that ministers must be satisfied that all of the individuals ... are of good character,'' said Ms McClure.
"The ministers were not satisfied that all of the individuals with control of Natural Dairy were of good character,'' she said "Accordingly, consent was declined.''
Mr Williamson, Minister for Land Information, and Ms Wilkinson, acting Minister of Finance, made their decision today against the proposed purchase of 16 dairy farms by UBNZ Assets Holdings Ltd, and the purchase of 80 percent of the shares in UBNZ Assets Holdings by Natural Dairy, from UBNZ Trustee Ltd.
The OIO recommended to the ministers that they consider the directors of Natural Dairy (NZ) Holdings to be the relevant individuals with control, and said that the good character of those directors could be affected by "ongoing investigations into transactions associated with its applications for consent''.
Natural Dairy's front woman May Wang was declared bankrupt earlier this month over a $22m debt relating to her hotel and property business.
The OIO recommended to the ministers that they determine entrepreneur Ms Wang to be the individual in control of the UBNZ Trust, and said that 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''.
Four Crafar farms previously purchased by UBNZ Funds Management Ltd and UBNZ Assets Holdings have been left in limbo, with the OIO still considering its options on those sales,.
The OIO could apply to the High Court to have the farms sold, and said that it plans to conclude its investigation into those specific sales. It said that each of UBNZ Assets Holdings Limited, UBNZ Funds Management Ltd and UBNZ Trustee Ltd was an associate of an overseas person: Natural Dairy (NZ) Holdings, and so consent was required to acquire the four farms and the mortgage over the properties.
Natural Dairy Holdings spokesman Bill Ralston said tonight the company had no comment at this stage.
It is understood to be considering its options but before it can make any announcement of its intentions it has to inform the Hong Kong Stock Exchange.