A Chinese-owned firm pulled out of a plan to buy 10 New Zealand dairy farms Monday, citing frustration at the regulatory process and the government's rejection of another large purchase last month. Dakang New Zealand Farm Group, which is 55-percent owned by China's Shanghai Pengxin, entered a sale and purchase agreement to buy seven dairy farms and three support farms from New Zealand- owned Pinny Farms in January.
The deal, which covered 3,300 hectares of land and 3,900 cows in the North Island Northland region, was submitted to the government's Overseas Investment Office (OIO) for approval in April, Dakang CEO Gary Romano said in a statement. The company had believed that "five months would be sufficient time to enable a rigorous and objective review of our plans for the farms, compared to the 70-working-day guideline the OIO has for turning around applications," said Romano. "However, to date we have had not received any advice that the OIO has considered the sale and/or made a recommendation to the ministers."
The decision to end the agreement was "somewhat based" on Shanghai Pengxin's failure to buy the 13,800-hectare central North Island holding of Lochinver Station, after government ministers rejected OIO advice last month and blocked the sale. Pure 100 Farm Ltd., a subsidiary of Shanghai Pengxin, had applied to the OIO last year to buy the 13,800-hectare Lochinver Station for 88 million NZ dollars (58.98 million U.S. dollars).
Associate Finance Minister Paula Bennett and Land Information Minster Louise Upston denied their decision was taken in light of controversies over Chinese and other foreign purchases of New Zealand land, insisting the application failed to meet statutory criteria for sensitive land sales under the Overseas Investment Act.
The Shanghai-based group already owns the 8,000-hectare Crafar farms in the central North Island and a controlling stake in SFL Holdings, which bought 4,000 hectares of South Island farms from Synlait Farms.
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