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Government in a "terrible position’ over Crafar: Key

Government in a "terrible position’ over Crafar: Key

By Paul McBeth

Feb. 27 (BusinessDesk) – The government is seeking advice on seeking a declaratory ruling on the meaning of Justice Forrest Miller’s ruling knocking back approval of the sale of the so-called Crafar farms to the the Shanghai Pengxin group.

Prime Minister John Key said at his post-Cabinet press conference he would be “uncomfortable” if his Ministers made a decision on the bid to buy the 16 Crafar family farms without having a firm grasp on the judgment, which found the Office Investment Office “materially overstated” the benefits to the New Zealand economy of the bid.

The government is “keen to make sure that the Overseas Investment Office fully understands the judgement from Justice Miller,” he said, especially given the Michael Fay-led consortium of rival bidders has taken the matter to the Court of Appeal.

“Until that position is clarified, I think it would be extremely dangerous for any party, either the minsters or the OIO, to move forward,” Key said. “That leaves the government in a terrible position, because Ministers ultimately could be judicially reviewed again and no-one wants to be in that position.”

Given the lack of certainty, Key said he would be surprised if the OIO made an early recommendation.

Key said that “from the Ministers’ point of view I’d be very uncomfortable with them making a decision, because they have sole responsibility those Ministers, unless they fully understand the law.”

The Fay-led consortium, known as the Crafar Farms Independent Purchaser Group, has appealed the second part of the ruling and is making a $171.5 million rival offer for the land, for which Pengxin is understood to have offered $210 million.

Last week, Pengxin took a swipe at the CFIPG, saying if it’s successful in derailing the existing offer it won’t be subject to the same level of scrutiny as the Chinese firm.

The OIO also confirmed to BusinessDesk last week that it was unlikely to meet its initial expectation of a new recommendation “in a matter of days”.

“In terms of the timing of the OIO's new recommendation, we asked (Pengxin) for their comments on the Crafar Farms Independent Purchaser Group's latest submission, in accordance with our usual process,” an OIO spokesman said. “We've received their comments and are currently making our way through them, and we're considering the Crafar Farms Independent Purchaser Group’s latest move and how this new development may affect the timing of our new recommendation to Ministers.”

The OIO had also not at that stage seen a Crown Law Office opinion on Judge Miller’s ruling.

(BusinessDesk)

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