The move re-opens the door for the Crafar Farms Purchase Group (CFPG) which welcomed the High Court’s decision, although Crafar's longtime receiver, KordaMentha, has indicated Shanghai Pengxin has until March 22 to resubmit an offer approved by the relevant New Zealand government ministry and competition body.
New Zealand’s land information minister, Maurice Williamson, and associate finance minister, Jonathan Coleman, who had approved the sale, said that a fresh ruling on the Chinese company’s bid would be made within days.
In a statement, the ministers said that ruling had changed the interpretation of how the investment laws were to be applied and that the OIO would “apply an approach consistent with the court's ruling and resubmit a recommendation report to ministers.”
Shanghai Pengxin said that it was shocked by the court’s decision but remained hopeful the deal would be cleared, a deal that “has received scrutiny” like no other.
At the same time, a CFPG spokesperson told FoodNavigator-Asia that its bid had “never been off the table” and KordaMentha was free to consider it open.
High Court intervention
Last month, the Chinese company’s local subsidiary Milk New Zealand Holdings was granted approval to buy the 16 farms by government ministers following a recommendation from the country’s Overseas Investment Office (OIO).
However the High Court of Wellington on February 15 ordered the government to review its decision to allow Shanghai Pengxin to buy the Crafar farms in response to a case filed by the Crafar Farms Purchase Group.
In his decision, Justice Forrest Miller said that the OIO’s recommendation to allow the purchase to occur “materially overstated” the economic benefit of the transaction to the New Zealand economy.
In effect, Miller ruled that the New Zealand government had used a false comparison when evaluating the benefits the Chinese would bring to the bankrupt farms against a New Zealand buyer.
The saga started when Crafar went into receivership in 2009 to as the recession bit and payments dropped from Fonterra. KordaMentha was then appointed as the farm’s receivers.
Led by businessman Sir Michael Fay, the Crafar Farms Purchase Group had made a NZ$171.5m offer for the farms back in September, which was declined by KordaMentha.
The group then took the government to the courts over the ministerial decision, in a move seen largely by industry stakeholders reeking of protectionism and perhaps even borderline xenophobia.