New Zealand halts farm sale to China's Shanghai Pengxin
- 15 February 2012
- From the section Business
A New Zealand court has blocked a move by the government to allow Chinese investors to buy farms in the country.
China's Shanghai Pengxin was looking to buy 16 farms spread across almost 8,000 hectares in the country's North Island.
Justice Forest Miller of High Court in Wellington has asked the government to reconsider its decision saying it had overstated the benefits.
A local farming consortium had appealed against the sale and offered to buy the land themselves.
"We're very pleased with the decision from Justice Miller,'' said Alan McDonald a spokesperson for the consortium.
"Our view is that Shanghai Pengxin never brought any real economic benefits to New Zealand."
Since the sale involves more than 5 hectares of land and is valued at more than 100m New Zealand Dollars ($84m; £53m), it had to approved by the Overseas Investment Office (OIO).
While the OIO had sent its recommendation for the deal last month, the court said that not all the criteria had been met.
Justice Miller said none of the people involved with NZ Milk, the subsidiary of Shanghai Pengxin looking to buy the farms, had adequate knowledge about the dairy industry, which he said was a prerequisite to approving foreign investment in the sector.
He added that since the farms were not in the best of the condition, any potential buyer, foreign or domestic, was likely to bring the same benefits of capital investment and improved productivity.
Despite the ruling by the court, the Chinese firm said it was confident that the sale would go ahead.
"Personally, for me, the ruling is a big surprise, I hadn't read the Overseas Investment Act in that way,'' said Cedric Allan, a spokesman for Pengxin.
"We're still pressing ahead as fast as we can, and we're still confident we are going to get the final sign-off.''