Chinese NZ farm purchase clears last legal hurdle

WELLINGTON -- A Chinese firm's controversial bid to buy 16 New Zealand dairy farms has cleared its final legal hurdle, after the Supreme Court rejected a bid by an indigenous Maori trust to stop the purchase.

The appeal against earlier judgments by the Tiroa Te Hape Trust, which was financed by an anonymous backer, was based on the grounds that purchaser Shanghai Pengxin lacked the relevant expertise and management experience to run New Zealand dairy farms.

In a brief judgment, the Supreme Court judges said they could see "no obvious error in the careful and common factual assessments" made in earlier rulings by the High Court and Court of Appeal upholding Shanghai Pengxin's purchase.

The decision brings an end to months of legal wrangling and clears the way for Shanghai Pengxin to purchase the farms through Hong Kong-registered subsidiary Milk New Zealand Holdings.

The Maori trust claimants were only interested in three specific farms, which they claimed were illegally appropriated by the New Zealand government in the distant past, although the grounds for appeal covered the whole 16 farms up for sale.

The trust had previously offered to work with Shanghai Pengxin in supplying New Zealand produce and had entered talks on buying the three farms it wanted, but the talks broke down in June over the price.

New Zealand Land Information Minister Maurice Williamson said on Wednesday that the decision is pleasing, because it allows Shanghai Pengxin to go ahead and transfer funds from China to complete the farm purchase.

Shanghai Pengxin, the Chinese company which spent the last 18 months waiting for final approval to buy the 16 North Island Crafar farms, said on Wednesday that it is delighted the Supreme Court has refused to allow a further legal appeal by iwi (Maori tribe), and that there is now no obstacle to the purchase being concluded before the end of the year.

"Over time, we hope we will demonstrate many benefits in New Zealand and China working together and maximizing the opportunities available for New Zealand's largest industry in China," the company said in a statement.

The sale of the farms has sparked a national debate that has risen to the highest level of government over what constitutes a strategic national asset in a nation whose primary industry is agriculture and under what conditions those assets should be sold to overseas interests.

The government had twice granted Shanghai Pengxin approval to purchase the farms following recommendations from its Overseas Investment Office (OIO), but both decisions were contested in court by the Crafar Farms Independent Purchasers Group (CFIPG), a consortium led by Fay and including Tiroa Te Hape Trust.

Shanghai Pengxin offered a reported NZ$210 million ($171. 82 million) for the farms in April last year, before the rival CFIPG offer of NZ$171.5 million was put to the receivers.

In February, the High Court in Wellington upheld the CFIPG argument that the OIO had failed to properly consider the benefits a foreign buyer would bring to the farms, and the court set aside the OIO's recommendation to the government.

After the government approved another recommendation from the OIO, the CFIPG appealed arguing that Shanghai Pengxin lacked the relevant expertise, an argument that the High Court earlier dismissed.

In August, the Court of Appeal upheld the earlier decision, saying Zhaobai Jiang, who owns 99 percent of the shares in Nantong Yingxin Investment Co Ltd, Shanghai Pengxin's parent company, was a "successful entrepreneur" with a record of successful property developments and a "fast-growing agribusiness" with interests in China and South America.