MEDIA RELEASE FROM NATURAL DAIRY (NZ) HOLDINGS LTD
24/05/10

Minister’s Comments “Outrageous Interference” In The Oio Process

Comments in an NZPA report today, quoting Agriculture Minister David Carter as saying Natural Dairy’s plans to purchase dairy farms were “unlikely to go through”, are an outrageous abuse of the Overseas Investment Office approval system, says Graham Chin, vice chairman of the Hong Kong based Natural Dairy (NZ) Holdings Ltd.

“This is nothing more than a blatant attempt to subvert what should be an independent process”, says Mr Chin. “As a government minister Mr Carter should be making no public comments, personal or otherwise, on our OIO proposal”.

Mr Carter is quoted as mentioning the OIO process “but he believed it was unlikely the farms would be sold to the Chinese bidder.” As the company already has a conditional sale agreement on the Crafar farms this can only mean Mr Carter has some knowledge that the OIO will not issue an approval or that the government will subsequently move to block the sale.

“Natural Dairy has spent months its time and considerable amounts of money to meet the requirements of the OIO and now we find the Minister of Agriculture seems to have pre-determined the entire approvals process”.

In response to many media requests today Natural Dairy made inquiries of the Agriculture Minister David Carter’s office regarding his reported comments.

Natural Dairy received the following reply:

“The Minister's reported comment regarding the proposal by Natural Dairy (NZ) Holdings Ltd to acquire Crafar farms was made at a National Party regional conference on Saturday. The Minister was questioned from the floor as to his opinion about the proposal, and he responded that he personally thought it was "unlikely" to go through.
He is on record as saying there is a strict Overseas Investment Office process to be followed, and that this proposal would have to meet the same thorough tests as every other overseas investor. He reiterated this process in answering the question on Saturday.
As Minister of Agriculture, Mr Carter has no official responsibility for the Overseas Investment Office process. As such, he cannot be seen to be interfering in the approval process, nor pre-determining the outcome. It is, in fact, an Associate Minister of Finance and the Minister for Land Information who make the decision”.

Natural Dairy is not prepared to accept this argument from Minister Carter. While he does not have ministerial responsibility for the Overseas Investment Office, at best his comments appear to be a very public coded message to the OIO that it should reject the Natural Dairy proposal. It must also influence, presumably, the opinions of the two ministers who will make the decision.

We re mind the Minister that the purchase represents 2% of dairy farm sales that occur each year in New Zealand and relates to some .003% of dairy cattle in this country. Perhaps the Minister has lost sight of the very small size of the transaction in the context of the entire New Zealand dairy industry.

Not withstanding Mr Carter’s comments (above) the situation is completely unacceptable and denies Natural Dairy fair process in seeking OIO approval. It also raises serious questions as to how genuine and understanding the Minister of Agriculture is in relation to New Zealand’s trading and investment relationship with countries such as China.

Mr Chin warns, “Does New Zealand want my company to take its huge investment in New Zealand factories and milk exports across the Tasman to Australia or to South America, where it will be welcomed? This seems to be Mr Carter’s message to us and any other potential investors from any other country.”

A conditional agreement to purchase the Crafar farms has been secured by UBNZ Funds Management Ltd and Natural Dairy will be resubmitting its application to the OIO in the very near future in the full expectation it will be dealt with on its merits.

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