OIO drums fingers over sale application

08-03-2010 | Richard Rennie

As tenders close for two more farms owned by Robert Crafar, approval remains to be granted for the sale of two others last month to a Chinese backed company.

Crafar's company NuGen Farms is in receivership.

The sales of two properties to UBNZ Assets Holdings, 20% owned by a Chinese company, are now subject to Overseas Investment Office (OIO) approval. However, by late this week the office had yet to receive UBNZ's application seeking that approval.

OIO concerns have focussed on Natural Dairy (NZ), the Chinese company holding a 20% shareholding in UBNZ Assets Holdings. The other 80% is owned by Chinese businesswoman May Wang who has a history of liquidated and defunct businesses.

Absence of any mortgages associated with UBNZ's land purchases is surprising, given the known history of May Wang.

Natural Dairy also has a complex history, having existed to all intents under two previous names before being formed late last year.

In its last guise as China Jin Hui Mining it was implicated in attempts to purchase farms from Robert Crafar's father Allan , prior to his company also going into receivership in October 2009. That deal fell over through a lack of funds.

China Jin Hui Mining ‘s business history includes three years of loss making. It also had a chairman who was found guilty of breaking Chinese securities regulations in an earlier business.

The company has also been implicated in a Hong Kong Stock Exchange fraud scheme, involving voluntary liquidation and sale of assets to management before creditors are paid out.

Major injections of share capital late last year and the name change to Natural Dairy (NZ) could indicate however where funds have come from for these latest land purchases.

Significant shareholdings were purchased in newly formed Natural Dairy (NZ) by two wealthy Chinese investors in December, buying $HK400 million of shares in the company.

The board of Natural Dairy (NZ) also contains several individuals who were also on the China Jin Hui board. These individuals have strong links to Chinese government, immigration and banking interests.

This sale of the two Robert Crafar properties at prices almost 20% above flat market values has surprised many in the real estate industry. One 190ha property at Norsewood sold for $7.1 million and another at Waitotara for $2.8 million.

Bayleys reports good interest in the remaining two property tenders that were to close last Friday (March 5).

"We have had enough tenders to select from and should have a good idea of who they all are by next week," said Richard Graham, Bayleys country manager.

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