Far North island on market despite probe

Motukawaiti Island, off Matauri Bay, is up for sale again. Photo/Peter de Graaf

A Far North island is on the market for $30 million - even though its last sale four years ago is still being investigated by the Overseas Investment Office.

Motukawaiti Island, the second largest of the Cavalli Islands off Matauri Bay, sold in 2010 for more than $11 million.

However, its new owner, a company called St Morris NZ, did not have permission to buy the 37ha island, which is classed as sensitive under the Overseas Investment Act.

The Overseas Investment Office (OIO) launched an investigation in 2011 but has yet to reach a conclusion.

Motukawaiti, also known as Step Island, is advertised on Private Islands Online and Vladi Private Islands, which is also offering Pakatoa Island in the Hauraki Gulf for $30 million and a peninsula near Russell for $18 million.

Land Information New Zealand's manager of crown property and investment, Brian Usherwood, told the Advocate the OIO was continuing to investigate the purchase of Motukawaiti Island to confirm whether it complied with the Overseas Investment Act 2005.

"This is a very complex investigation involving a number of individuals and organisations ... The OIO has sought, and continues to seek, specific information and documentation."

Mr Usherwood said providing any further information could impede the OIO investigation. Labour Party inquiries in Parliament have also drawn a blank.

Matauri Bay resident and former MP Dover Samuels said attempts to find out who the owners were had been met with "smoke and mirrors". The owners had shown little interest in meeting Matauri Bay locals face-to-face, despite repeated invitations from Ngati Kura.

In 2012, then Land Information Minister Maurice Williamson said St Morris NZ did not apply for, or obtain, consent to buy the island. According to the Companies Office St Morris NZ's sole shareholder is Auckland-based Wenning Han.

However, last year the mortgage holder on the property, Jun Zhang, applied to put St Morris NZ into liquidation, saying it owed him $16 million. The court threw out his application but ownership of the island was transferred to Mr Zhang, Mr Han's former business partner, in August 2013.

The island's three titles were previously owned by the Motukawaiti Island Trustee Company. Shareholders Raymond and Helen Arnesen now own Paihia Beach Resort and Spa.

Motukawaiti Island hit the news this year when Cyclone Lusi swept away a polystyrene-filled floating dock. It was smashed on rocks, scattering polystyrene across the pristine Cavalli Islands.

The island's owners arranged a clean-up but a delay of several weeks meant debris was spread throughout the islands, greatly increasing the cost and scale of the operation. The Northland Regional Council is still considering a fine or prosecution. It may also tighten up the rules around the use of polystyrene.