A company owned by a Shanghai billionaire has been fined $20,000 for failing to get consent after a shareholding change affecting ownership of the 1118ha Carrington Estate on the picturesque Karikari Peninsula in Northland.
Damien O'Connor, Minister for Land Information and Associate Minister of Finance Megan Woods ruled in the matter, according to the Overseas Investment Office.
Entities controlled by Gui Guojie got retrospective consent over control of the Carrington Estate and the Whatuwhiwhi Top 10 Holiday Park but had they not done that, the state was considering court action, possibly forcing sales.
"The OIO imposed an administrative penalty of $20,000 for the retrospective consent. If consent had not been granted, the OIO intended to progress its investigation and determine whether or not to apply to the court to require disposal of the assets acquired in breach and/or seek civil pecuniary penalties," a decision out last night said.
Carrington Estate is a resort and golf course, vineyard and winery, wetlands, residential land with accommodation, a disused quarry and other non-productive land being held for further development, the OIO noted.
Ownership activity dates back to 2013 and 2015 when the billionaire's company got state consent and bought its original interest in the land, classified as sensitive so therefore needing state clearance for any foreign ownership.
When the Chinese businessman's interests bought via Shanghai CRED last decade, plans were to continue to operate the existing resort on the land in a similar fashion to the party he had bought it from and to further develop it in a long-term business plan.
That purchase was to generate additional tourism to Karikari Peninsula, sales from the winery, more investment into the business, increased processing of primary products through the vineyard and environmental and historic heritage benefits via consultation with the Department of Conservation and Pouhere Taonga Heritage NZ.
But in July 2018, the OIO learned of ownership changes, which meant Guojie's indirect ultimate ownership shot from about 39.9 per cent to about 83 per cent.
The OIO said it would have moved if retrospective consent had not been sought.
"Ministers have granted retrospective consent because they were satisfied that the investment had and was likely to result in a benefit to New Zealand that was substantial and identifiable," said the decision, out last night.
Investments on the land to date include upgrading and building accommodation facilities and completing preparatory works for the resort's expansion, the OIO said.
Further development of the land was hindered by the rejection of the Shanghai CRED's resource management application by Te Runanga-a-iwi o Ngāti Kahu and "a reluctance from shareholders to invest further capital where results were not forthcoming".
"With increased access to capital and willingness to invest following the shareholding changes, the applicants now intend to fit out a new golf gear retail shop to supplement the existing golf course, expand the planted vineyard on the site, and set up additional clay target shooting facilities," the OIO was told.
All that is expected to result in additional investment being introduced into New Zealand.
The business will keep its current staff and employ about another 19 people in an area with few employment prospects, the OIO noted.
It will also maintain Carrington Estate as a functioning business in a remote part of the country.