Govt turns down Crafar farms bid

File photo / Christine Cornege

The Government has turned down Hong Kong listed Natural Dairy NZ's controversial bid to buy the Crafar dairy farms.

Land Information Minister Maurice Williamson and Conservation Minister Kate Wilkinson said they had declined Natural Dairy's Overseas Investment Office application to buy the 16 farms from receivers in a deal thought to be worth about $200 million.

They also declined Natural Dairy's retrospective applications for clearance for an earlier purchase of four Crafar farms.

The Ministers' decision covers the applications by Natural Dairy (NZ) Holdings Limited to acquire UBNZ Assets Holdings Limited and 16 of the Crafar farms.

The Ministers also declined consent to UBNZ Assets Holdings Limited's retrospective application to acquire the four Crafar farms it purchased in February 2010.

"We concur with the Overseas Investment Office's recommendation that consent should be declined," the Ministers said.

"We will not be commenting further on our decision."

The purchase was originally intended to be the first stage of a $1.5 billion plan to establish a pasture-to-supermarket shelf operation supplying infant formula and other dairy products to the Chinese market.

However, the plan, which sparked public concerns about overseas ownership of farmland and a consequent tweak in overseas investment rules hit a series of hurdles.

Auckland businesswoman May Wang, who was the public face of Natural Dairy in New Zealand, was earlier this month bankrupted for a $22 million debt.

In October the Serious Fraud Office launched a probe into Natural Dairy's affairs after the Overseas Investment Office passed it information the SFO said "may disclose serious or complex fraud".

Overseas Investment Office (OIO) manager Annelies McClure said under the Overseas Investment Act one of the criteria for consent was that ministers had to be satisfied that all of the individuals involved with applications were "of good character".

"The Ministers were not satisfied that all of the individuals with control of Natural Dairy were of good character. Accordingly, consent was declined."

The OIO said it considered that the charges Ms Wang was currently facing with regard to her previous businesses "and the possibility of further charges cast doubt on her good character".

"In addition, her reported conduct in the context of her bankruptcy proceeding raised further concerns."