Landcorp dismisses conspiracy theory in Crafar saga

Photo / Herald on Sunday

State-owned Landcorp's interest in 16 former Crafar farms is primarily commercial and not a Government-directed move to derail Hong Kong company Natural Dairy NZ's bid for the properties, Landcorp says.

The farm company this week revealed it was considering making an offer for the central North Island farms valued at about $100 million which have been managed by receivers since October last year.

Landcorp chairman Jim Sutton has said Landcorp's interest is due to unique circumstances around the sale of the farms including "reputational risks" to the dairy industry and "New Zealand Inc". His comments came after Agriculture Minister David Carter was reprimanded by Prime Minister John Key this week for publicly remarking the sale of the farms to interests associated with Natural Dairy NZ was "unlikely to go through".

But Landcorp chief executive Chris Kelly yesterday dismissed the "conspiracy theory" that Landcorp's interest was at the direction of the Government.

"I can assure you that is not the case. This is a commercial decision from our board."

Landcorp had a remit to operate commercially "but if it has additional spinoffs as well then so much the better".

In this case those spinoffs included helping maintain the value of dairy farms generally.

Mr Kelly acknowledged Mr Sutton had received "'some specific feedback from various farming people and others" about the proposed sale to Natural Dairy, "but at the end of the day we're still a commercial organisation and if it doesn't work from that point of view we won't do it".

Mr Carter yesterday told the Herald he'd had no discussions with Landcorp or its board about the farms and he was unaware that any other ministers had either.

Kerry Knight, a lawyer acting for Auckland businesswoman May Wang who is seeking to buy the farms on behalf of Natural Dairy NZ, said "any overseas investor would be concerned at the sequence of events", including the comments from Mr Carter and Mr Sutton. He said the unique circumstances referred to by Mr Sutton, "can only mean you've got the Chinese buying".

"If it was Australian buyers would it still be unique circumstances?"

Natural Dairy NZ's plans to use the farms as the basis of a $1.5 billion industry supplying dairy products to the Chinese market have already run into Overseas Investment Office difficulties.

Earlier this month the office said the company may have broken foreign investment laws with the earlier purchase of four Crafar family farms without approval.

- additional reporting NZPA