4 August 2015

OIO takes action against Australian investor

The Overseas Investment Office (OIO) is taking High Court action against Australian-owned Carbon Conscious New Zealand Limited and New Zealand-owned Katey LR Investments Limited for alleged breaches of the Overseas Investment Act 2005.

The action relates to the purchase of a 115 hectare property near Stratford, Taranaki in August 2012. The proceedings ask the High Court to impose a civil penalty of up to $300,000.

“Katey LR bought the property in 2012 and agreed to onsell it to Carbon Conscious,” said OIO Manager Annelies McClure.

Carbon Conscious wished to purchase and plant trees on the property, but required consent under the Act to purchase the property itself. Carbon Conscious did not have time to obtain consent prior to the end of the 2012 planting season. Carbon Conscious instead funded the purchase of the property by Katey LR in exchange for the use of the property to plant trees, with the intention of obtaining consent and acquiring the property from Katey LR later.

“The OIO learned of the purchase in 2013, when Carbon Conscious sought consent to buy the land from Katey LR.

“Although the sole shareholder of Katey LR is not an overseas person, we consider that her relationship with Carbon Conscious – and the joint manner in which Carbon Conscious and Katey LR acted to acquire the property – makes Katey LR an associate of an overseas person. Therefore Katey LR required consent to purchase sensitive land.

“While both companies appear to have attempted to delay – or forego the need for – consent, we consider that they acted on poor legal advice and did not realise they were breaking the law.

“Because of this, we have taken the view that pursuing a civil penalty is more appropriate than prosecution,” Ms McClure said.

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