Chinese company Shanghai Pengxin has yet to complete the purchase of the Crafar farms, the Court of Appeal was told yesterday as the latest Sir Michael Fay-led legal challenge to the acquisition was heard in Wellington.
The Independent Crafar Farms Purchase Group which competed against Shanghai Pengxin to buy the 16 farms from receivers but lost out, is challenging the Overseas Investment Office's recommendation to approve the deal which was later signed off on by Land Information Minister Maurice Williamson and associate Finance Minister Jonathan Coleman.
The group's legal counsel Alan Galbraith, QC, said the OIO erred in deciding that Shanghai Pengxin's partnership with state-owned Landcorp - which will run the farms - satisfied the Overseas Investment Act's requirement for relevant experience.
But while Shanghai Pengxin's spokesman Cedric Allen recently refused to confirm whether the purchase of the farms had gone through, the court was yesterday told the transaction was on hold pending the outcome of the appeal.
Mr Galbraith told the court the focus of the OIO's appraisal of Shanghai Pengxin's relevant experience and acumen should be on the man in ultimate control of the corporation, billionaire Jiang Zhaobai.
Although the Shanghai Pengxin's application noted the company's investments in sheep and soybean farms, the OIO's decision had no analysis of whether that gave Mr Jiang the experience required to invest in the farms.
But Crown lawyer David Goddard, QC, argued that Mr Jiang, who was raised in a rural area of China and who worked on farms, was closely involved in the management of Shanghai Pengxin's agribusinesses.
Mr Goddard said Mr Jiang and his fellow directors had further demonstrated their expertise in agribusiness by hiring a competent entity like Landcorp to manage the farms. The judges have reserved their decision.
Sir Michael's group successfully challenged an initial ministerial decision to approve the purchase on the grounds the economic benefits to New Zealand were not clearly established.
However, Shanghai Pengxin's rejigged application was endorsed by the OIO and ministers in April.