May Wang company invests in Genesis Research

May Wang. Photo / Natalie Slade

UBNZ Funds Management, the potential purchaser of the Crafar dairy farming empire, has taken a 19.9 per cent stake in Auckland-based biotechnology company Genesis Research and Development Corp.

Genesis raised $446,278 from the group of investors represented by UBNZ through the placement of 7.4 million shares at 6c each, and hoped to raise more from them, chief executive Stephen Hall said.

UBNZ had approached Genesis about the investment, he said. Shareholder approval would be needed if they took a larger stake in Genesis, as they had indicated they wanted.

UBNZ is a group of Chinese investors bidding to buy $1.5 billion of New Zealand dairy farms including those from the failed Crafar farming operation. It is fronted by controversial businesswoman May Wang, who owes creditors $22 million from her failed property development company.

"We don't see any problem with May, she's obviously had her financial difficulties in the past, but she's an intelligent and astute person and is moving forward I guess," Mr Hall told NZPA.

The company was also reviewing the possibilities of dairy industry product development and research, building on Genesis' work into immunology and inflammation.

"It's more orienting to shorter term, lower risk projects, more product-oriented," he told NZPA.

Genesis had a traditional focus on human health, but did a lot of research into agricultural biotech, some of which it considered had some economic interest.

"We've had collaboration in the dairy industry before, both on the animal side and the milk products side."

Last month, Genesis said it was suspending operations in New Zealand with the loss of nine jobs after funding dried up in what was considered a high risk sector, which was feeling the fallout of the global financial crisis.

"It is very pleasing that the investment will allow Genesis to continue operations in New Zealand," Mr Hall said today.

The change in focus was in part due to a lack of funding from the Foundation for Research Science and Technology for cutting edge, high risk biotechnology projects, he said.

Genesis was in discussions with possible investors in its Solirna Biosciences, to allow further development of its genetic technology.

Other Genesis assets would be retained until value could be realised for shareholders, he said.

Genesis has its annual shareholder meeting tomorrow.

Ms Wang today upped her offer to 6 cents in the dollar to the creditors she owes $22 million, with the offer to be put before the court next month.

This was a 3.5c increase on the 2.5c offer her creditors decided to accept yesterday from her failed property development company.

The new proposal had been accepted at a creditors' meeting, and will be heard in the High Court at Auckland on a date yet to be set.

Westpac's bankruptcy application against Ms Wang has been adjourned until July 27.

- NZPA