There is widespread apprehension regarding the sale of UDC Finance, the country's largest finance company, to China's HNA Group. This is because UDC is an important lender to domestic industrial companies, because it may have to raise its lending rates and because little is known about the purchaser.

Credit rating agency Standard & Poor's is also concerned and has downgraded UDC's credit rating from A- to BBB, and the company remains on CreditWatch negative.

The rating agency stated that "the downgrade reflects our opinion that the likelihood of timely support from UDC's ultimate owner - ANZ Bank - has reduced following the announcement of its sale to the privately owned Chinese conglomerate HNA Group (not rated)".

The sale of UDC Finance continues a disturbing trend over the past 30 years, where a large number of our banks and finance companies have either gone bust, been bailed out by the government, sold by New Zealand shareholders to Australian investors at deeply discounted prices or, in the case of UDC, are being sold by highly rated overseas owners to unrated and relatively unknown foreign entities.

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These developments have resulted in huge losses for depositors and a significant transfer of wealth from New Zealand to overseas shareholders.

UDC was established as Financial Services Ltd in 1937 to rescue an ailing business called The New Zealand Investment Trust.

One of its main objectives was to provide finance to New Zealand industrial businesses and in the late 1930s it partly funded the establishment of Todd Motor Corporation.

In 1951 Financial Services was purchased by London-based United Dominion Trust and renamed United Dominion Corporation (UDC). Shortly afterwards it helped finance the first Masport motor mowers and the initial commercial Hamilton jet boat.

In the 1960s it had 30 per cent of the country's finance company business and ANZ Banking Group (New Zealand) acquired a 20 per cent shareholding.

The London based majority shareholder sold out through a sharemarket float in 1970 with the public acquiring 28 per cent and ANZ Bank holding 72 per cent. The mid-1970s was a golden period for finance companies, with seven listed on the NZX, including BNZ Finance, Broadlands Dominion Group, General Finance and Marac Holdings, as well as UDC.

These were all subject to successful takeover offers in the late 1970s and early 1980s, with UDC delisting from the NZX in 1980 after a full takeover offer from ANZ Bank.

Unlike most other finance companies, UDC was not tempted by the high flying investment companies or property developers in the 1980s, nor by speculative property projects in the early 2000s.

A number of former directors and senior executives believe UDC's business model could have been very successful across the Tasman but it has been restricted to New Zealand by its Australian owner.

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As a consequence, it effectively sailed through the late 1980s and 2000s while a high proportion of the country's financial institutions went bust, were bailed out by the Crown or were sold to foreign interests.

UDC Finance is one of the country's premier financial institutions because it has stuck to its knitting, which is lending to industrial companies, and has never been seduced by slick investment company executives or speculative property investors.

A number of former directors and senior executives believe UDC's business model could have been very successful across the Tasman but it has been restricted to New Zealand by its Australian owner.

This is one of the problems with 100 per cent overseas owned companies: their foreign owners often use them as cash cows rather than growth vehicles.

The latest KPMG Non-bank Survey shows that UDC is the country's largest finance company with $2.602 billion of gross loans, followed by Toyota Finance New Zealand with $777m of gross loans and Fisher & Paykel Finance with $694m.

UDC reported a net profit after tax of $58.5m for the September 2016 year.

On January 11, ANZ announced the proposed sale of UDC to HNA Group for $660m, a price-to-book ratio of 1.6 times. The transaction is expected to be completed later this year.

ANZ New Zealand chief executive David Hisco was quoted as saying: "The sale of UDC is consistent with our strategy to simplify the bank and is a good outcome for customers and staff. HNA Group is one of the world's largest asset finance and leasing companies, and it intends to preserve UDC's operations including offering continued employment to all staff".

HNA, which is a private company, is a massive conglomerate founded by Chen Feng in 1997. It has substantial activities in aviation, tourism, financial services, real estate, logistics and other industries.

It controls a large number of airlines including Hainan Airlines and Tianjin Airlines, which recently inaugurated flights between China and Auckland. Hainan Airlines is China's fourth largest carrier.

Last October, Bloomberg reported that HNA had announced US$34b ($47b) of acquisitions in the previous 12 months, including the purchase of a 25 per cent stake in the Hilton Hotel Group.

Media reports in the past seven days have indicated that HNA Group is purchasing the Frankfurt-Hahn Airport in western Germany and a majority stake in SkyBridge Capital, the investment firm founded by Trump adviser Anthony Scaramucci. HNA owns 20 per cent of Virgin Australia and recent Australian media reports suggest it will list a large Chinese logistics business on the ASX.

The ownership of our banks has switched from the UK to Australian interests over the past 100 years, but Chinese buyers will be at the top of the queue if any further banks or finance companies are offered for sale.

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The issue with the UDC Finance sale is not that it is being sold to foreign interests - it has been overseas controlled for nearly 70 years - but that it is being sold to an organisation that is on a vast global acquisition binge and its new owner may not have the same financial disciplines and governance as ANZ, UDC's current owner.

New Zealand banks and finance companies are already overseas controlled.

Our four largest banks, which represent 84 per cent of all banking assets, are all Australian owned. Kiwibank, the largest New Zealand owned bank, represents only 4 per cent of the country's total banking assets.

Our four largest finance companies, representing 53 per cent of total sector assets, are overseas owned as are eight of the largest 10. The only New Zealand owned top 10 finance companies are Motor Trade Finance and Nelson Building Society.

The last major finance company to fall into foreign hands was Fisher & Paykel Finance, which was sold to an Australian company after Chinese interests acquired 100 per cent of Fisher & Paykel Appliances, the finance company's parent.

Meanwhile, Hellaby Holdings is now under the control of Melbourne based Bapcor, while the Chinese company Zhejiang RIFA Holdings has reached its 75 per cent target of NZX listed Airwork Holdings.

The directors of Blue Sky Meats, which is also the subject of a Chinese takeover offer, are attempting to negotiate a higher price.

Late last year, Binxi announced its intention to make an offer for 100 per cent of Blue Sky Meats at $2.20 a share.

Blue Star's activities include livestock procurement, processing, marketing and distribution of lamb, beef and venison products to international markets. It had turnover of $124m in its latest financial year.

The company wrote to shareholders this week advising them to "WAIT, TAKE NO ACTION" as the offer doesn't close until mid-February and directors are trying to convince Binxi to pay $2.50, instead of $2.20 a share.

However, the clear message from recent developments is that ownership of the meat processing industry has evolved from British interests 100 years ago to New Zealand owned companies in the late 20th century, but the Chinese are slowly acquiring significant stakes in our food processing sector.

Meanwhile, the ownership of our banks has switched from the UK to Australian interests over the past 100 years, but Chinese buyers will be at the top of the queue if any further banks or finance companies are offered for sale.

THE DEAL

Sold: UDC Finance, NZ's biggest finance company
Gross loans: $2.602 billion
After-tax profit: $58.5m (2016)
The seller: ANZ Bank
The price: $660m
The buyer: HNA Group
Based: Hainan, China
Gross assets: $124b-plus
• Interests include airlines, financial services, hotels