Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Shanghai Pengxin challenges Lochinver sale decision

Shanghai Pengxin mounts legal challenge to government's rejection of Lochinver purchase

By Jonathan Underhill

Oct. 15 (BusinessDesk) - Shanghai Pengxin says it will seek a judicial review of the government's decision to decline its $88 million purchase of Lochinver Station amid signs the investment group's strategy in New Zealand is being thwarted by a new hardline approach to foreign land purchases.

Terry Lee, a director of Pengxin subsidiary Milk New Zealand, said the Chinese company's Pure 100 Farm unit which was to have made the purchase, was seeking "clarity on the ‘counterfactual’ to be used when assessing sales of non-urban land of greater than 5 hectares to overseas investors."

Associate Finance Minister Paula Bennett and Land Information Minister Louise Upston last month went against advice from the Overseas Investment Office to approve the sale, saying they weren't convinced it provided enough benefit to New Zealand. The ministers had sat on the OIO recommendation for some months before declining the deal. Another Shanghai Pengxin business, the 55 percent-owned Dakang New Zealand Farm Group, this week quit efforts to buy 10 farms in Northland, citing five months of silence from the Overseas Investment Office.

The Lochinver decision drew criticism from owner Stevenson Group, which said the government was trampling on its right to get the best possible price for the 13,843 hectare farm near Lake Taupo.

"If the assumption is that the property would have been sold anyway, then judgement also has to be applied as to what the hypothetical purchaser would do with the property," Lee said of the Lochinver decision.

The development plan for Lochinver was to invest a further $20 million in the property, on top of the purchase price, and create at least six new jobs, Lee said. But when the deal was compared to a hypothetical New Zealand purchaser, the net additional benefit was calculated at just $3 million and only one new part-time job.

“We do not believe that the correct counterfactual was adopted when assessing our application," Lee said. "On more than one occasion, the vendor made it clear to the OIO that it required a certain price for the farm to justify its sale and to allow reinvestment into the vendor’s other New Zealand businesses, with consequential benefits in job creation and productivity."

Pengxin’s commitment to existing farm employees and farm improvements were also important to Stevenson Group, Lee said. "The vendor also confirmed to the OIO that it would not undertake the capital investment proposed by Pure 100. In other words, the counterfactual should have been the status quo, which would have significantly increased the net benefit associated with our application."

“The judicial review will seek to obtain clarity for all parties on what constitutes a viable counterfactual and this will, we believe, do a great deal to restore confidence and certainty amongst investors and sellers,” Lee said.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

RNZ: Porirua Most Expensive Region To Rent, According To Trade Me

A rental website shows this town is now New Zealand's most expensive region to rent a house, ahead of Wellington and Auckland cities. More>>

ALSO:


Stats NZ: Nearly 1,000 More Big Businesses Now Than Two Decades Ago – Media Release

There are now 2,690 big businesses in New Zealand employing more than 100 staff – nearly 1,000 or 58 percent more than 20 years ago, Stats NZ said today. Over the 20 years to February 2020, the total number of enterprises in New Zealand increased ... More>>

ALSO:

RNZ: Housing Boom Could Get Worse, Economist Warns

Economists are calling on the Reserve Bank to reinstate lending restrictions, warning the housing market is spiralling out of control. More>>

ALSO:

Westpac: Sets Out Plan To Go Cheque-Free

Westpac NZ has announced details of its plan to phase out cheques, after signalling in May that it would be supporting a move to other forms of payment. Cheques will cease to be available as a means of payment after 25 June 2021. Westpac NZ General ... More>>

ALSO:

NZTA: Major New Zealand Upgrade Programme Projects Go To Tender

Two major New Zealand Upgrade Programme projects are beginning tenders for construction. The New Zealand Upgrade Programme is a $6.8 billion investment to get our cities moving, to save lives and boost productivity in growth areas. The first Auckland ... More>>

Reserve Bank: RBNZ Seeks To Preserve Benefits Of Cash

The Reserve Bank – Te Pūtea Matua is taking on a new role of steward of the cash system “to preserve the benefits of cash for all who need them”, Assistant Governor Christian Hawkesby told the Royal Numismatics Society of New Zealand annual conference ... More>>

ALSO:


CERT NZ: Malicious Computer Virus Targeting New Zealanders

CERT NZ, the government agency which supports organisations and individuals affected by cyber security incidents, says a recent surge of increasingly sophisticated malware attacks is affecting everyday New Zealanders as well as large organisations. The ... More>>

ALSO:

Economy: NZ Small Business Recovery Continues In September

Xero, the global small business platform, today released its Small Business Insights (XSBI) for September revealing an uptick in small business jobs and year-on-year revenue growth in New Zealand. Nationwide, the average number of jobs in the small ... More>>

ALSO:


Courts: Businessman Eric Watson Sentenced To A Four-Month Jail Term

New Zealand businessman Eric Watson has been sentenced to a four-month jail term in the UK for contempt of court, TVNZ reports. More>>

OECD: Area Employment Rate Falls By 4.0 Percentage Points, To 64.6% In Second Quarter Of 2020

The OECD area employment rate – the share of the working-age population with jobs – fell by 4.0 percentage points, to 64.6%, in the second quarter of 2020, its lowest level since the fourth quarter of 2010. Across the OECD area, 560 million persons ... More>>

Spark: Turns On 5G In Auckland And Offers A Glimpse Into The Future Of Smart Cities

Spark turned on 5G in downtown Auckland today and has partnered with Auckland Transport (AT) to showcase some of the latest in IoT (Internet of Things) technology and demonstrate what the future could look like for Auckland’s CBD with the power of 5G. 5G is ... More>>

Stats NZ: Monthly Migration Remains Low

Since the border closed in late-March 2020, net migration has averaged about 300 a month, Stats NZ said today. In the five months from April to August 2020, overall net migration was provisionally estimated at 1,700. This was made up of a net gain ... More>>