A billionaire Chinese political donor's bid to buy a stake in a Waikato stud farm is facing "delays" with the New Zealand vendor saying it is "unlikely" to proceed.
In November the Overseas Investment Office (OIO) approved a deal that would see Inner Mongolia Horse Rider Industry (NZ) pay $5.44m for a one-third share in Highview Stud.
Highview Stud is a 120ha horse farm in Hamilton and IMRHI had pledged to invest and increase its workforce from 18 to 31 as part of its purchase.
IMHRINZ is wholly foreign-owned, largely by Chinese horse-racing mogul Lang Lin, and was given approval until December 20, 2020 to complete the purchase.
Highview studmaster and vendor Brent Gillovic told the Herald money had yet to change hands and prospects of completing the sale appeared to be dimming.
"It hasn't done though, and it's unlikely to happen," he said.
IMRHINZ director Simon Poon said he was presently "on vacation in Hong Kong" but insisted Rider Horse still intended to proceed with its plans. Poon did note that the Covid-19 outbreak was complicating matters.
"I have not heard from the boss [Lang] that there will be any changes to our plan. I foresee there will [be] some delays due to the attack of the virus worldwide," Poon said.
IMRHINZ's business model - it employed a small office of five in New Zealand - involved exporting hundreds of horses annually from New Zealand to China with airfreight.
Covid-related travel restrictions have sharply pinched the airfreight market with passenger flights - which carried cargo in plane bellies and accounted for 80 per cent of the market - sharply reduced as airlines grapple with a precipitous drop in international air travel.
The ex-trade minister, the billionaire and the $150,000 donation
Logistics also required Chinese veterinarians to accompany the horses - and travellers from China are presently banned from visiting New Zealand.
According to documents obtained from the OIO under the Official Information Act, IMRHINZ had argued its plans gelled with Winston Peters' racing policy, which had been wholly adopted in the coalition agreement between Labour and New Zealand First.
IMRHINZ made headlines last year after it was revealed its $150,000 donation to the National Party in 2017 was facilitated by then-Trade Minister Todd McClay. McClay had first met Lang - known in China as "Mr Wolf" - while in Beijing on government business.
The donation, the largest received by the then-governing National Party during the 2014-17 term, was legal as electoral finance laws consider New Zealand-registered companies to be not be foreign - regardless of their ownership.
The OIO applies a different test, requiring it to vet proposed sensitive transactions where control is vested overseas.
Documents filed with the OIO show IMRHINZ is almost totally Chinese-owned, with Lang having an effective 32.7 per cent stake, and the reminder being held largely by China-based venture funds.
IMRHINZ told the OIO it had made the donation "to show its support of the National Party, which has regularly sought to strengthen the trade relationship between New Zealand and China ... it is appreciative that the National Party had chosen to prioritise this."
Otago university professor Andrew Geddis said the differing treatment of foreign-controlled, but locally registered, companies by the overseas investment and political donations regimes was nonsensical.
"It seems anomalous that we regard a company like this as being a problem when it comes to putting money into the New Zealand economy, but not when putting money into our politics," he said.
"We're treating our whenua as being worthy of greater protection from outside influences than our democratic political processes. But the health of one cannot be separated out from the other."
Following the McClay donation revelation Justice Minister Andrew Little announced foreign donations would be banned. The reforms did not, however, align tests for political donations with those of the OIO. New Zealand-registered companies are still treated as non-foreign donors regardless of ownership.
The OIO also canvassed complaints online of animal mistreatment by the Rider Horse group in China. IMRHINZ told the OIO these complaints were "nothing more than unwarranted, baseless speculation."
Veterinarian Dr Jonathan Hope submitted a letter - and pictures of Rider Horse facilities in Yunnan - in support of IMRHINZ.
"During the years I have known Mr Lang Lin and the people of Rider Horse, I have learnt that the welfare of their horses is of prime importance so I am very sorry to see people making unfounded false claims in or out of social media," Dr Hope wrote.