Property developers fined for failing to get OIO consent
16 December 2019
Court orders property developers to pay $123,000 for failing to get OIO consent
The owners of a Birkenhead property have been ordered to pay a total penalty of $123,000 for failing to get consent from the Overseas Investment Office (OIO).
The Auckland High Court has ordered FFG Investments Limited and Grand Sky Limited to pay the penalty, and $10,000 in costs, following an investigation by the OIO.
FFG and Grand Sky have the same three shareholders.
OIO Group Manager, Vanessa Horne, says the companies both acquired an interest in the property without first getting consent from the OIO.
“Overseas investors wanting to buy sensitive land in New Zealand must get consent from the OIO,” Ms Horne says.
“It’s important that overseas investors, particularly those intending to undertake residential developments, fully comply with the Overseas Investment Act. When we discover anyone who has broken the rules, we take appropriate enforcement action.”
FFG purchased a property at Birkenhead in Auckland in October 2013. Two years later, FFG sold the property to Grand Sky. FFG and Grand Sky intended to carry out a residential development at the property.
When FFG bought the property, and later when Grand Sky entered into an agreement to buy the property from FFG, the companies’ shareholdings meant they were considered overseas people under the Act.
However, by the time the title was transferred to Grand Sky it was no longer considered an overseas person under the OIO rules.
Ms Horne says the OIO has an important role in protecting New Zealand’s sensitive land.
“We take our role very seriously and will continue to pursue cases where people have bought land illegally.”
The 2.87 hectare property is considered sensitive land under the Overseas Investment Act because it adjoins a reserve.
FFG will pay a penalty of $82,500 and Grand Sky will pay $40,500. Together they will pay $10,000 towards the OIO’s court costs.