Crafar deal still stands - receiver

May Wang. Photo / Greg Bowker

Receivers of the Crafar farms said a conditional agreement for the sale of the properties remained on foot despite the bankruptcy of frontwoman for the bid, May Wang.

Wang is set to appeal a bankruptcy ruling over a $22 million debt, after she lost her year-long battle with Westpac at the High Court in Auckland yesterday.

Natural Dairy, the company that wants to buy the Crafar farms, is speaking to its legal advisers about how the bankruptcy might affect its bid.

However receivers KordaMentha said the conditional agreement with UBNZ Funds Management, which is planning to buy the farms on behalf of Natural Dairy, still stands.

"The agreement remains subject to Overseas Investment Office approval and we continue to receive communication with the applicant's solicitors as to the progess of the consent process," KordaMentha's Brendon Gibson said.

Meanwhile Natural Dairy (NZ Holdings) voted to dump vice-chairman Graham Chin from its board at its annual shareholder meeting yesterday, although it appears he is still acting as a spokeperson for the company.

Chin this morning issued a terse, two sentence statement via the company's PR representative Bill Ralston about the company's reaction to Wang's bankruptcy.

"In relation to the events of the past few days Natural Dairy (NZ) Ltd vice chairman Graham Chin says the company is studying the issues involved and talking with its legal advisors," he said.

"The company can make no substantial statements to the media until such time as it has filed an announcement to the Hong Kong stock exchange."

Wang told the court during a bankruptcy hearing last month that the deal would fall over if she was bankrupted. Wang, who earns $200,000 a year from UBNZ, got into financial difficulty when her property development empire Dynasty Group collapsed in 2008.

She has already lodged an application to appeal a High Court decision which rejected her creditors' proposal this week.

Wang also wants the bankruptcy suspended while the appeal to quash the bankruptcy is dealt with.

The devout Buddhist told the court that she wanted to pay her creditors because she believed it was the right thing to do.

About $1.35 million or 6.5c in the dollar was made available for a creditors' proposal that was declined this week by Associate Judge Hannah Sargisson.

Judge Sargisson also ruled on her bankruptcy yesterday, putting Ms Wang's assets into the hands of the Official Assignee.

Under the Insolvency Act the Official Assignee takes control of all assets and property owned by a person from the date of bankruptcy.

UBNZ bought four Crafar farms earlier this year for about $47.5 million and some of those farms have started producing income.

The group has not declared any income to IRD despite claiming $24 million in GST refunds.

The Serious Fraud Office is investigating the agreements between Natural Dairy and UBNZ. No charges have been filed.

But Ms Wang does have Companies Office charges against her as director of the Dynasty Group. She is defending the charges; the trial has been set down for June next year.

The deal for the other farms cannot proceed until it has received Overseas Investment Office approval - a stamp that is needed when any foreign company wants to buy more than $100 million of New Zealand assets.

Yesterday IRD lawyer Nick Malarao said Wang had put her creditors and the wider public at risk through her commercial failures and therefore it was appropriate that she was bankrupted.

Malarao added that her appeal on her creditors' proposal had "very little chance of being successful".

Judge Sargisson said the decision to bankrupt Wang had not been easy and she had to weigh up a "delicate balance" of interests.

Meanwhile the Government has issued guidelines around its new rules for foreign investment in farmland to the Overses Investment Office, setting the threshold at which the new "economic interests" test and "mitigating factors" will be given emphasis.