SFO probe blocks sale of Crafar farms

Serious Fraud Office chief executive Adam Feeley. Photo / Brett Phibbs

Natural Dairy's plans to buy 20 Crafar farms soured yesterday as the Serious Fraud Office said it was investigating the Hong Kong-listed company after concerns were raised by the Overseas Investment Office.

The SFO said yesterday afternoon it would investigate the proposed sale and purchase of the 20 Crafar farms, in receivership, situated across the central and lower North Island.

The investigation would focus on transactions between Natural Dairy and associated companies UBNZ Trustee, UBNZ Assets Holdings and UBNZ Funds Management after receiving information from the Overseas Investment Office.

Serious Fraud Office chief executive Adam Feeley said the information received from the investment office, together with material from other sources, warranted an investigation, "that is to say that an investigation into transactions involving Natural Dairy and UBNZ group may disclose serious or complex fraud".

Mr Feeley said he was conscious of the "possible impact" the investigation could have on the companies involved and therefore the initial investigation would be done with "all reasonable haste".

"After the initial investigation and report, we will decide whether there are reasonable grounds to believe an offence involving serious and complex fraud may have been committed."

If warranted, the SFO would undertake a further "in-depth investigation under the powers of Part II of the SFO Act".

Annelies McClure, manager of the Overseas Investment Office, said it would not be possible to make a recommendation to relevant ministers on whether Natural Dairy's application to buy the farms should proceed until the SFO investigation was completed.

The minister in charge of the investment office, Maurice Williamson, was unavailable for comment last night and Labour's overseas investment spokesman, David Parker, declined to comment.

Greens co-leader Russel Norman, who opposes Natural Dairy's bid and all overseas ownership of farmland other than small blocks, said news of the investigation meant Natural Dairy's chances of succeeding with its bid were now small. "There's very little chance they'll get OIO approval."

The Overseas Investment Office is itself investigating the purchase of four dairy farms by UBNZ Assets Holdings in February this year, which appeared to have been done without the necessary consents.

UBNZ Group director May Wang said her firm was confident the investigation would reveal no wrongdoing. "We appreciate that the SFO now has a job to do and we will co-operate fully ... as we have nothing to hide."

- Additional reporting: Adam Bennett