Adam Bennett

Adam is a political reporter for the New Zealand Herald.

Crafar sale: Most Kiwis prefer local group's bid

Sir Michael Fay's consortium says it is still proceeding with a legal challenge to the OIO ruling. Photo / APN
Sir Michael Fay's consortium says it is still proceeding with a legal challenge to the OIO ruling. Photo / APN

Days after Chinese company Shanghai Pengxin won approval for its purchase of the Crafar Farms, New Zealanders say they would rather the group led by controversial Kiwi asset stripper Sir Michael Fay owned the farms.

Shanghai Pengxin's bid to buy the 16 Central North Island dairy farms was approved by Land Information Minister Maurice Williamson and Associate Finance Minister Jonathan Coleman on Friday.

However, a Herald DigiPoll conducted during the week leading up to that decision found that despite Sir Michael's history of profiting hugely from privatised state assets, most of the 307 people surveyed would have preferred his consortium bought the farms.

Asked which of the two buyers they preferred, just under 64 per cent said the Fay consortium, 15 per cent chose Shanghai Pengxin, 15 per cent didn't know and 6 per cent said none of the above.

Sir Michael's consortium, which included farmers and iwi, offered about $170 million, about $30 million less than Shanghai Pengxin. Receivers Korda Mentha said given the difference between the offers, the Fay consortium's bid was never seriously considered.

However, Shanghai Pengxin's purchase was delayed by a successful legal challenge to the Government's initial decision by Sir Michael's consortium, which forced officials and ministers to reconsider the deal.

Yesterday, a spokesman for the consortium said they were still proceeding with a legal challenge to the Overseas Investment Office's ruling that Shanghai Pengxin's offer met the legislative requirements around the Chinese company's ability and relevant experience to own and operate the farms.

The consortium's lawyers are also poring over Friday's decision looking for further grounds for a challenge.

Sir Michael and his business partner David Richwhite moved to Switzerland in 1997 after years of allegations they had rorted the tax system and committed fraud (the wine box affair). They were cleared of any wrongdoing after a long public inquiry.

In 2007, a company owned by the pair agreed to pay $20 million to settle an insider trading case brought by the Securities Commission.

Sir Michael also achieved notoriety for making huge profits from selling shares and assets for newly privatised former State Owned Enterprises, including Telecom and Tranzrail during the 1990s.

Meanwhile, Prime Minister John Key downplayed the prospect raised by Sir Michael over the weekend that Friday's decision would open the door to a flood of Chinese investment in New Zealand farmland.

"I don't think that's actually happening at this point. It's more a perception than a reality. If that perception turned into reality the Government might want to go back and address that position."

- NZ Herald

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