Archive

Posts Tagged ‘Overseas Investment Office’

Doing ‘the business’ with John Key – Here’s How (Part # Rua)

25 April 2013 19 comments

.

.

Continued from:  Doing ‘the business’ with John Key – Here’s How

Once upon a time, at the bottom of the world, there was a small country that prided itself on being a fair, open, and uncorrupted society.

I’m no longer sure about the last bit.

Last year, Transparency International ranked New Zealand as the #1 least corrupt nation on Earth. We ranked above Denmark (#2), Finland (#3), Sweden  (#4), Singapore (#5),  and  Norway (#6).

I’m no longer certain we deserve that top ranking, either.

The further that the Sky City/Convention Centre and Crafar farm deals are  scrutinised – the stronger the odour of something unpleasant fills our nostrils.

To recap, let’s start with the Crafar farms deal with Shanghai Pengxin.

.

Tahi: Crafar Farms/Shanghai Pengxin/National Government

.

The timetime of the Crafar deal runs something like this,

5 October 2009: Crafar Farms placed into receivership, owing $216 million to creditors.

22 December 2010: Government  blocks  bid by Natural Dairy to buy the 16 Crafar farms on ‘good character’ grounds.

27 January 2011: KordaMentha accepts offer from Shanghai Pengxin International Group Ltd to buy Crafar Farms.

13 April 2011: Shanghai Pengxin lodges application with the Overseas Investment Office (OIO) to buy the Crafar farms.

26 September 2011: Crafar farms receiver KordaMentha  rejects a conditional NZ$171.5 million offer for 16 central North Island dairy farms from a group led by controversial former merchant banker Michael Fay.

27 January 2012: Government ministers approve Shanghai Pengxin’s application to purchase 16 Crafar farms.

15 February 2012:  High Court delays sale of Crafar farms to Shanghai Pengxin.

20 April 2012:  Government ministers , Land Information Minister Maurice Williamson and Associate Finance Minister Jonathan Coleman  approve the Overseas’ Investment Office’s (OIO) new recommendation to allow the sale of the 16 Crafar farms to Shanghai Pengxin.

At least, that is the version for public consumption.

Recent revelations indicate that much more was taking place behind the scenes. If we take that timeline and add the revelations that have come out in the last few months, the picture takes on a murkiness and a hint on something decidedly shady,

5 October 2009: Crafar Farms placed into receivership, owing $216 million to creditors.

2 December 2009: KIWI DAIRY CORPORATION LIMITED registered. (Then changes to ORAVIE LIMITED, 20 December 2010. Then changes to ORAVIDA LTD, 20 January 2011. Then changes to ORAVIDA NZ LIMITED, 13 May 2011. ) Shareholders: Jing Huang, Julia Jiyan Xu, and Deyi Shi.  (Source)

11 June 2010:  National Party receives $50,000.00 donation from Susan Chou. (Source)

30 July 2010:  National Party receives $150,000 donation from Susan Chou. (Source)

18 November 2010: MILK NEW ZEALAND CORPORATION LIMITED* registered. Directors: Terry Lee and Jiang Zhaobai. (Source)

22 December 2010: Government  blocks  bid by Natural Dairy to buy the 16 Crafar farms on ‘good character’ grounds.

27 January 2011: KordaMentha accepts offer from Shanghai Pengxin International Group Ltd  to buy Crafar Farms.

31 May 2011: National Party receives $100,000 donation from Susan Chou. (Source)

22 July 2011:  ORAVIDA LTD registered. Shareholders: Jing Huang, Julia Jiyan Xu, and Deyi Shi. (Source)

27 July 2011:  ORAVIDA PROPERTY LTD changes name to  KIWI DAIRY INDUSTRY LTD.  Shareholder: Deyi Shi (Source)

13 April 2011: Shanghai Pengxin lodges application with the Overseas Investment Office (OIO) to buy the Crafar farms.

26 September 2011: Crafar farms receiver KordaMentha  rejects a conditional NZ$171.5 million offer for 16 central North Island dairy farms from a group led by controversial former merchant banker Michael Fay.

22 November 2011: National Party receives $50,0000 donation from Citi Financial Group. Shareholders: Yan Yang and Qiang Wei. (Source) (Source)

22 November 2011: National Party receives $1,600 from Oravida NZ. (Source) (Source)

26 November 2011:  NZ General Election

30 November 2011: National Party receives further $55,000 donation  from Oravida NZ. (Source) (Source)

27 January 2012: Government ministers approve Shanghai Pengxin’s application to purchase 16 Crafar farms.

15 February 2012:  High Court delays sale of Crafar farms to Shanghai Pengxin.

20 April 2012:  Government ministers , Land Information Minister Maurice Williamson and Associate Finance Minister Jonathan Coleman  approve the Overseas’ Investment Office’s (OIO) new recommendation to allow the sale of the 16 Crafar farms to Shanghai Pengxin.

*   “Milk New Zealand Holding Limited”  is the official applicant and purchaser of the 16 Crafar farms. It is supposedly a subsidiary of Shanghai Pengxin,

” Applicant

3. The Applicant is Milk New Zealand Holding Limited (“the Applicant”), a Hong Kong incorporated company which is an overseas person under the Act.

4. The Applicant will register as an overseas company under the New Zealand Companies Act 1993 prior to acquiring the Investment. The Applicant does not have any current interests in New Zealand as at the date of this Application.1

1 The 99% ultimate owner of the Applicant, Zhaobai Jiang, has a [redacted]% interest in a company ([redacted*])that has applied for consent to acquire development land at [redacted] . No decision has yet been made on this application.” – Source

(*Note: Despite OIO redacting the second company, this blogger has  found that it is actually “NATURE PURE LIMITED“.  Terry Lee and Zhaobai Jiang are both listed as Directors.)

Despite numerous company name changes; newly registered companies; and a lengthy trail of shareholders, the one link that does stand out between Shanghai Pengxin and financial donations to the National Party is Terry Lee.

Mr Lee, along with Deyi Shi and  Xing Hong, registered KIWI DAIRY CORPORATION LIMITED on 2 December 2009, which, after several name changes, ended up as ORAVIDA NZ LIMITED  on 13 May 2011. Xing Hong was also a one time Director of ORAVIDA NZ LIMITED and ORAVIDA PROPERTY LIMITED.

Deyi Shi is still a current Director of both  ORAVIDA NZ LIMITED and ORAVIDA PROPERTY LIMITED.

On 22 and 30 November, 2011, the National Government received donations totalling $56,600 from Oravida NZ Ltd.

A further $300,000 was donated to National by Auckland businesswoman, Susan Chou, who, through her husband Zhaowu Shen, had a connection with Jack Chen and NZ Natural Dairy Ltd – the first unsuccessful attempt by Chinese investors to gain control of the Crafar farms.

Two months later, on 27 January 2012, National approved the sale of 16 Crafar farms to Shanghai Pengxin subsidiary, Milk New Zealand Holding Limited.

Readers are invited to draw their own conclusions from the facts presented.

Continued at:   Doing ‘the business’ with John Key – Here’s How (Part # Toru)

.

*

.

Sources & References

OIO:  Decision required under the Overseas Investment Act 2005: Milk New Zealand
Holding Limited

CAFCA:  December 2010 decisions

NZ Companies Office

Elections NZ: Returns of party donations exceeding $30,000

Elections NZ: Returns of party donations exceeding $20,000

Interest.co.nz: Govt Ministers rubber stamp Overseas Investment Office approval of Shanghai Pengxin’s Crafar farms bid

Acknowledgements

Adam Bennett, NZ Herald: Chinese cash flows to Nats

Adam Bennett, NZ Herald: China link to Nats’ $200,000

.

.

= fs =

First blogged 28 April 2012

Three Questions to Key, Williamson, Coleman, et al…

22 April 2012 2 comments

.

.

National released this media statement on Scoop.co.nz yesterday, when they announced their intention to proceed with the sale of the Crafar farms to Shanghai Pengxin,

.

Ministers approve Crafar farms bid

.

Friday, 20 April 2012, 11:22 am
Press Release: New Zealand Government

Hon Maurice Williamson
Minister for Land Information

Hon Dr Jonathan Coleman
Associate Minister of Finance

20 April 2012
Media Statement

Ministers approve Crafar farms bid

Land Information Minister Maurice Williamson and Associate Finance Minister Jonathan Coleman have approved the new recommendation of the Overseas Investment Office (OIO) to grant consent to Milk New Zealand Holding Limited to acquire the 16 Crafar farms

“New Zealand has a transparent set of laws and regulations around overseas investment,” Mr Williamson says.

“Those rules recognise the benefits that appropriate overseas investment can bring, while providing a range of safeguards to protect New Zealanders’ interests. They are applied evenly to all applications, regardless of where they are from.

“We have sought to apply the law in accordance with the provisions of the Overseas Investment Act and the guidance of the High Court.

“We have carefully considered the OIO’s new recommendation. The OIO sought advice from Crown Law and independent legal advice from David Goddard QC. The Ministers also sought advice and clarification from Mr Goddard.

“We are satisfied that on even the most conservative approach this application meets the criteria set out in the Act and is consistent with the High Court’s judgment.”

Dr Coleman said the consent came with stringent conditions.

“These 27 conditions have been imposed to ensure Milk New Zealand’s investment delivers substantial and identifiable benefits to New Zealand,” Dr Coleman says.

The conditions require Milk New Zealand to invest $16 million into the farms and to protect and enhance heritage sites

“The combined effect of the benefits being delivered to New Zealand as a result of this transaction is substantial.”

A copy of the OIO’s new recommendation is at: http://www.linz.govt.nz/sites/default/files/docs/overseas-investment/oio-recommendation-crafar-farms-20120420.pdf

A copy of the OIO’s decision summary is at: http://www.linz.govt.nz/sites/default/files/docs/overseas-investment/decision-summary-201110035.pdf

ENDS

Source

.

Jonathan Coleman says that, ” The combined effect of the benefits being delivered to New Zealand as a result of this transaction is substantial. 

Maurice Williamson sez, ” Those rules recognise the benefits that appropriate overseas investment can bring…

And Our Dear Leader, John Key, smiles, waves, and said,

Ministers could have overturned that decision, but there were no reasons to do so. The OIO correctly interpreted the legislation, and had they turned it down simply on the basis of being Chinese, it would not only be unlawful but unacceptable and would have been overturned in the courts.” – Source

The questions I have for John Key, Maurice Williamson, Jonathan Coleman, et al in  National are;

  1. What possible benefit is there to  New Zealand when the Crafar farms owe a massive $216 million to predominantly Dutch and Australian  banks; the sale to Shanghai Pengxin is for $210 million; and the purchasers intend to invest only an addition $14 million in the 16 farms – $875,000 per farm? The proceeds for the sale of the Crafar farms will not stay in New Zealand – they will flow back to Australia.
  2. How can the sale of a revenue-earning asset (eg, farms) to overseas investors be ‘beneficial’ to New Zealand when the profits from those assets will flow overseas, to offshore bank accounts. Profits will  not be spent nor further re-invested in this country.
  3. Considering that New Zealand is a world leader in dairy production, what does Shanghai Pengxin – a company specialising in property development (the sixth largest in China; Appendix 5, para 42) and not dairying – have to offer us that the alternative New Zealand consortium, led by Michael Fay, and other local dairy farmers could not? Is this, effectively a vote of No Confidence in local farmers?

Several politicians have made several comments that the new Chinese owners will bring ‘new skills and innovation’ to our dairying industry.

This blogger finds that rather hard to believe. All of a sudden, New Zealanders are incapable of developing their own farms?

But perhaps the issues we should be most concerned out is a loss of revenue from those farms, as profits are repatriated overseas.

Michael Fay estimates we could lose $15 million per annum once the farms are producing milk for export,

Sir Michael says at the forecast payout of $6.35 a share, the new owners would earn $30 million a year, half of which will go to state-owned enterprise Landcorp for farming the land.

“This transaction with Shanghai Pengxin is a very, very bad investment for New Zealand. It doesn’t stack up on any economic basis,” said Sir Michael.

“It’s hard to see that half of it going overseas constitutes an economic benefit to this country. It’s a cost, it’s hard to define it as an investment”. ” – Source

And Bernard Hickey wrote about our loss of income as we sold more and more assets into overseas ownership, steadily worsening our current account deficit,

For decades we have spent more than we earned as a nation and funded the difference by borrowing foreign money through our banks, or directly in the form of companies borrowing offshore or the government borrowing from foreign funds and banks. If we couldn’t borrow the money, we would sell assets, be it companies, land or state assets.

We’ve been kidding ourselves for decades that, like the L’Oreal ad, we were worth it. We have run chronically high current account deficits for most of the last 30 years. We believed, and have been encouraged by our leaders, bankers, and asset buyers, that New Zealand could afford it and we deserved it.

But in our bones we knew we couldn’t, and it’s great to see Justice Miller at the High Court now tell us in this decision it has to stop, even if the government can’t or won’t do it. His ruling that any foreign buyer has to prove a bigger benefit to the nation than a local buyer sets a very high threshold.

It effectively says that any buyer has to invest an awful lot more, create a lot more jobs and pledge to reinvest dividends here, otherwise there is an inevitable drain on the nation.

In the last decade we have reached the limit of how much we could borrow and sell. For any chronic overspender, there is a point where they can’t borrow any more because they can’t afford the interest payments and they don’t have anything left to sell. Just before that moment comes, they accelerate their asset sales and borrowing to pay the interest on the previously borrowed money and to pay the dividends on the previously sold assets…

… The government itself has been the heaviest borrower through the bond markets. It doesn’t matter who we have borrowed it off, but again China is the biggest creditor through its sovereign wealth fund. Our state owned enterprises have also been borrowing heavily overseas and the government is about to start selling the jewels in the crown, at least some of which will go offshore.

The irony is that this frenzy of last minute borrowing and asset selling accelerates the process of making our economy unsustainable, because it pushes up our economy currency and hampers our ability to export our way out of this mess.

Just in case you question the logic, here’s the chart showing how New Zealand’s Gross National Income per capita, which is what we get to keep after we have paid the interest and the dividends, has been falling since 2003.”

.

Source

.

Quite simply, the more we borrow from overseas; the more income-generating assets we sell to overseas investors – the more money we end up losing on every deal. The profits that used to stay in NZ to be re-invested, are now flowing out to other countries; other peoples’ bank accounts. Leaving us poorer and poorer year after year.

Selling farms after selling most of our profitable State Owned Enterprises will make things worse.

It’s also hard to see how any potential New Zealand purchaser can compete with the incredible wealth and access to funds, that nations such as China possess. Indeed, the Overseas Investment commission made this very point in Appendix 5, para 19/a when it stated,

“… 19. The purchase price for the farms is NZD $[redacted] m, plus payment for the stock, estimated to be NZD $[redacted] m. The Applicant is willing to pay this price because:

a) it has access to relatively low cost capital;”

We are in dire straights when an offshore investor can outbid a New Zealander because they have access to cheap funds to which we do not.

This is not a level playing field. The deck is now stacked firmly against us.

The deal with Shanghai Pengxin calls for further investments,

  • The Applicant must invest the higher of NZD $14m or the value agreed between the Applicant and Landcorp in
    clause 4.4 of the draft Property Management Agreement (see attachment “1”) on investment for development
    purposes on the Investment.” (ref Appendix 1, para 6)
  • The Applicant must establish an on-farm training facility for dairy farm workers in accordance with clause 5(c) of the draft Property Management Agreement (see attachment “1”). The Applicant must contribute a minimum of NZD $[redacted] m towards the capital cost of establishing this facility. (ref Appendix 1, para 7) We don’t know the value of this “training facility – the OIO has blanked out that information.)
  • The Applicant must give two scholarships of not less than NZD $5,000 each year to students of the on-farm training facility. The first two scholarships are to be awarded by 31 December 2013.” (ref Appendix 1, para 8)

Aside from some walking tracks and other contractual obligations (which we recently discovered are not followed up by anyone from the Overseas Investment Commission – so we cannot be certain that the OIO’s Conditions of Consent are followed through by Shanghai Pengxin, nor any other foreign investor) – what does New Zealand gain, financially, from this deal?

Let’s re-cap:

  1. Sale price of $210 million – goes to foreign-owned banks in Australia and Netherlands. Benefit to NZ: nil
  2. Profits from export of milk from the 16 Crafar Farms – mostly remitted to China. Benefit to NZ: nil/negative ($15 million p.a. loss in overseas income)
  3. Additional investment required in farms – $14 million*. Benefit to NZ: nil. $14 million gain – wiped out after one year of profits ($15 million) remitted back to Shanghai Pengxin, in China
  4. Scholarships for two students, @ $5,000 per-person. Benefit to NZ: $10,000 p.a.

And that, folks, seems to be it: $10,000 per year.

In return, the new foreign owner gets,

  • $15 million p.a. in profits
  • 15 million Fonterra shares
  • dairy products exported to China (along with profits made)

Now, unless this blogger’s arithmetic is seriously out-of-kilter, it’s hard to see how Jonathan Coleman’s comment holds true that,

The combined effect of the benefits being delivered to New Zealand as a result of this transaction is substantial. 

What, precisely, are those ‘benefits’?!?  Because none are apparent to this blogger.

Some further matters that warrant comment:

Point 1.

Mr Key says that,

Ministers could have overturned that decision, but there were no reasons to do so. The OIO correctly interpreted the legislation, and had they turned it down simply on the basis of being Chinese, it would not only be unlawful but unacceptable and would have been overturned in the courts.” – Source

Let’s deal with that straight away.

It’s bullshit.

In 2002, when American millionaire, John Griffin purchased historically-significant Young Nick’s Head on the East Coast,  there was considerable anger and opposition from many locals, and throughout New Zealand.  Such was opposition that a hikoi to Parliament ended up with 200 people protesting on the grounds,

Around noon on Monday 5 August a group of about 200 protestors arrived at parliament grounds, Wellington. Many of them had been on the hikoi (march) from Young Nick’s Head, Gisborne, which left 11 days earlier. Most of the hikoi participants were from the Ngai Tamanuhiri iwi, who were dispossessed of the land around Young Nick’s Head in the 19th century.

The protest group asked to see finance minister Michael Cullen, who is to decide on Friday 9 August whether to allow the sale of Young Nick’s Head to the US millionaire John Griffen. Mr Cullen was not available, nor the prime minister Helen Clark. The Speaker of the House, Jonathan Hunt, told the protestors they could not stay on the grounds overnight, and were not to erect any tent or other structure. (The precedent was the tent embassy in parliament grounds after the Hikoi of Hope in 1999, which maintained a presence for four months before being broken up with arrests).   ” – Source

When Shania Twain purchased 25,000 hectares off South Island high-country near Wanaka, in 2004, there was considerable anger and resentment,

”  The contentious issue of foreign ownership of New Zealand land is flaring again following a government decision to allow Canadian singer Shania Twain to buy nearly 25,000 hectares (62,000 acres) of picturesque mountain farmland.

Foreign ownership of New Zealand land stirs high passions among the nation’s usually phlegmatic citizens.

Farmers in this primarily agricultural country argue wealthy offshore investors are pushing land prices far beyond their potential worth as productive property, while other New Zealanders argue their birthright is being sold to the highest bidder…

… Anti-foreign ownership groups estimate that between 6 and 7 percent of commercially viable New Zealand land is now owned by offshore interests.” – Source

New Zealanders have always opposed land sales. Ever since Pakeha colonisers came to this country and said to Maori, “Have we got a deal for you!!”, there has always been a scepticism toward the sale of land to foreigners. That feeling exists regardless of nationality, ethnicity, skin colour, etc.

In fact, John Campbell took Key to task on this very issue when the Prime Minister tried to play the “racism card” on his show, on 20 April,

.

John Campbell Prime Minister interview Crafar Farms Sky City Casino

Source

.

KEY:  “… let’s say you just want to say ‘no’ because they’re Chinese-”

CAMPBELL:  ” I don’t think anyone- Wait a second. I think that’s underhanded and disingenuous. I don’t think anyone is saying ‘no’ [because they're Chinese]. I think people are talking about 8,000 hectares of prime dairy country and it’s foreign ownership not Chinese ownership.”

Despite Campbell making that point succinctly, Key carried on with the same theme – as no doubt he had been instructed by his media advisors, to stick to a couple of core-points.

It suits John Key – as it did with Maurice Williamson – to attempt to paint opposition to the Crafar Farm sales to Shanghai Pengxin as “racism” or “xenophobia”.

No one likes to be called racist (except for for right wing extremists – but they’re deranged anyway), and to have that accusation thrown at the public is National’s shameful attempt to portray opposition to the Crafar sale as ‘irrational’.

Somewhere up on the Ninth Floor of the Beehive; in the Prime Minister’s department; John Key’s media advisors are busily spinning this line to deflect criticism from their Boss.

These paid merchants of mendacity are clever buggers; university educated – and taxpayer funded. We pay to have them teach politicians how to spin bullshit to us.

Not a nice thought, is it?

Whether Key’s spin doctors and media advisors  will be successful re-defining the debate is another matter entirely. They have their work cut out for them, going by polling by Fairfax and NZ Herald,

.

.

.

Good luck in trying to dismiss two-thirds or three quarters of the public on this issue, Mr Key. As they say in business; the customer is always right.

Point 2.

Ministers could have overturned that decision, but there were no reasons to do so. The OIO correctly interpreted the legislation, and had they turned it down simply on the basis of being Chinese, it would not only be unlawful but unacceptable and would have been overturned in the courts.” – John Key, 27 January 2012

This is the second line that Key’s spin-doctors have advised him and other Ministers to push: that the law allows these sales to proceed and MPs hands are tied.

Except… when it suits John Key, he is more than willing to trade off the law for other considerations,

.

Source

.

In return for a new $350 million convention centre, John Key simply has to change the gambling laws.

Just as John Key changed employment laws in October 2010, to suit Warner Bros, in the making of “The Hobbit” movies,

.

Source

.

Funny ole world, in’it?

John Key sticks to the “letter of the law” like a fly to dog poo.  But when it suits him and his cronies, he can be… flexible.

What you are witnessing, my fellow New Zealanders, is what is colloquially known as “Crony Capitalism“.

Is this really how we want our country to be governed?

.

* Note: the original OIO condition of a once-only $14 million investment has been increased with the latest OIO review, to $16 million. This blogger replies with a “whoopty-bloody-doo“; it makes little difference in the long term.

.

*

.

References

The OIO Decision:  Decision required under the Overseas Investment Act 2005: Milk New Zealand
Holding Limited

Additional

No checks on foreign buyers of Kiwi land

NZ to lose ‘millions a year’ from Crafar sale

.

.

= fs =

Al Capone lives again?

16 March 2012 2 comments

|

"Hey, mack. Ya gots somethin' I want."

|

There’s a old cliche in gangster movies that goes something like this,

Hey, Luigi, I gots an offer ya cain’t refuse!”

[cue machine guns being locked & loaded]

Ya dirty rat-

[rata-tata-tata-tata...]

It seems that our Chinese cuzzies have been watching a few too many gangster movies,

|

Source

|

Mr Cheng Li, the “political counsellor” at the Chinese Embassy in Wellington, has threatened warned ‘suggested’ that Chinese investment in NZ may be at risk if the Shanghai Pengxin deal to buy the 16 Crafar farms is not permitted to proceed.

Someone should tell Mr Li that,

  1. We are not a canton of China nor an occupied state like Tibet,
  2. New Zealanders don’t take kindly to being “leaned on”. We didn’t like it in 1984 and ’85  when  our American cuzzies   tried to pressure the Lange Government to abandon our nuclear-free policy – and we certainly don’t like it when someone  “heavys” us to make a deal we don’t want.
  3. This does not enamour New Zealanders to welcome overseas investment in our country.

It’s interesting that the OIO (Overseas Investment Office) stated that Shanghai Pengxin is a good corporate citizen. That may  certainly be, and the owners of that company are probably  Honourable Men.

The same, unfortunately cannot be said of the Chinese Government. “Monstering” us to sell, is simply  not a good look.

Go back to spying on Tibetan activists and Falun Gong members, Mr Li.

|

|

= fs =

In a matter of days… not nine months?!

16 February 2012 2 comments

 .

.

The Crafar Saga;  a time-line on the sale process,

.

5 October 2009: Crafar Farms placed into receivership, owing $216 million to creditors.

22 December 2010: Government  blocks  bid by Natural Dairy to buy the 16 Crafar farms on ‘good character’ grounds.

27 January 2011: KordaMentha accepts offer from Shanghai Pengxin International Group Ltd to buy Crafar Farms.

13 April 2011: Shanghai Pengxin lodges application with the Overseas Investment Office (OIO) to buy the Crafar farms.

26 September 2011: Crafar farms receiver KordaMentha  rejects a conditional NZ$171.5 million offer for 16 central North Island dairy farms from a group led by controversial former merchant banker Michael Fay.

26 November 2011: Parliamentary Election

27 January 2012: Government ministers approve Shanghai Pengxin’s application to purchase 16 Crafar farms.

15 February 2012: High Court over-rules  Government’s decision consenting to Shanghai Pengxin’s application to purchase

.

The OIO spent nine months assessing the Pengxin bid, which is reported to have valued the farms at $210 million, some $40 million higher than the bid by a consortium of New Zealand bidders led by merchant banker Michael Fay.” – Source

We don’t have a clear timeframe for this process but expect to receive the resubmitted recommendation report from the Overseas Investment Office in a matter of days, not weeks.” -  Mr Williamson, Ibid

Interesting…

It  took nine months for the OIO (Overseas Investment Office) to report their decision to Ministers Williamson and Coleman, for their rubber stamp approval…

But Minister Williamson now reckons it will only a matter of days to receive the resubmitted recommendation report from the Overseas Investment Office?!?!

… and this is the government that swears, hand-on-heart, that the extraordinary delay (applications normally take 50 – 70 days to process – not nine months) in processing and approving the Crafar purchase by Shanghai Pengxin, had nothing to do with the November election?!?!

The only thing worse than lying politicians?

Politicians who don’t lie very convincingly.

What a shabby, shonkey, shameful  government we elected last year.

 .

.

Kiwis, Cows, and Canadian singers…

31 January 2012 3 comments

.

.

A little bit of recent history first…

.

As the dust settles over the sale of the Crafar Farms to Shanghai Pengxin, it may be worth looking at some aspects of how this government handled the sale, and it’s aftermath…

For starters, a time-line on the sale process,

.

5 October 2009: Crafar Farms placed into receivership, owing $216 million to creditors.

22 December 2010: Government  blocks  bid by Natural Dairy to buy the 16 Crafar farms on ‘good character’ grounds.

27 January 2011: KordaMentha accepts offer from Shanghai Pengxin International Group Ltd to buy Crafar Farms.

13 April 2011: Shanghai Pengxin lodges application with the Overseas Investment Office (OIO) to buy the Crafar farms.

26 September 2011: Crafar farms receiver KordaMentha  rejects a conditional NZ$171.5 million offer for 16 central North Island dairy farms from a group led by controversial former merchant banker Michael Fay.

27 January 2012: Government ministers approve Shanghai Pengxin’s application to purchase 16 Crafar farms.

.

The first matter that arises is the length of time from Shanghai Pengxin’s initial application (13 April 2011), to consent being issued by relevant Ministers: over nine months.

(Strangely, 13 April 2011 was a Sunday. Is it usual for government offices to be open in the weekend?)

The OIO (Overseas Investment Office) sets time limits for itself to process application,

.

Estimated decision times

There is no statutory timeframe within which an application for consent must be decided. However applications generally fall into one of three categories according to complexity with category 3 being the most complex. These categories provide a guide for how long it may take for a decision to be made:

  • Category 1 applications, where the OIO aims to make decisions within 30 working days from the date of registration. Examples include: (a) applications for consent to purchase significant business assets,
    (b) “sensitive land” decisions delegated to the OIO by Ministers that don’t fall into the categories below,
    (c) variations to existing consents.
  • Category 2 applications where the OIO aims to make decisions within 50 working days from the date of registration.  Examples include: (a) “sensitive land” applications for consent requiring Ministerial consideration e.g. the purchase non-urban land greater than five hectares in size, where it includes or adjoins other sensitive land, such as conservation land, reserves etc
    (b) applications for exemptions,
    (c) applications where the overseas person is intending to reside in New Zealand indefinitely.
  • Category 3 applications, where the OIO aims to make decisions within 70 working days from the date of the registration.  Examples include: (a) applications to acquire an interest in fishing quota,
    (b) applications that involve special land being land that includes foreshore or the bed of a river or lake,
    (c) where the applicant intends to establish a purchasing programme such as a series of land acquisitions in a specific area for a specific project,
    (d) applications in respect of which a third party submission has been received by the Ministers or the OIO,
    (e) applications where the Ministers or the OIO have decided that consultation with third parties is appropriate in considering whether or not to grant consent.

Note that these targets apply to high quality, well prepared and analysed applications, and excludes the time where the OIO is waiting for the applicant to provide further information and the time for Ministers to consider and make decisions on relevant applications. 

Source

.

Even if the Crafar farm sale had been considered as a “Category 3″  application – there is considerable difference between 70 working days (deadline around 17 June 2011) -  and nine months.

A cynic might suggest that  Ministerial approval was delayed because of last years’ election. There is considerable public opposition to farm land sales to non-New Zealanders and this would have had a profound impact on National’s electoral support.

I would go so far as to say that National would have lost another couple of percentage points (minimum) in Party Votes – and therefore lost the election itself.

It is therefore National’s “good luck” that the decision to approve the sale to Shanghai Pengxin came two months after the General Election.

.

A lot of Racist Angst or Righteous Anger?

.

The first media reports that Ministerial consent had been granted for the Shanghai Pengxin appeared around 11am on the morning of January 27.

At 11.23am, Interest.co.nz published a web story, headed, “Govt Ministers rubber stamp Overseas Investment Office approval of Shanghai Pengxin’s Crafar farms bid” .

At 11.28am, TVNZ’s website reports, “Turning down Crafar sale ‘unlawful’ – Key” .

Ten minutes later, and Scoop.co.nz, reported, “Sale of Crafar farms to Pengxin is approved”.

At 2.22pm, TVNZ’s story appeared, “Fay group fights Crafar farms sale to Chinese”.

And this appeared on TV3′s website at 4.02pm, “Parties slam Crafar farm sale to Chinese”.

There were other stories on this issue – but these carried the gist was what the media was reporting. It was undoubtedly the lead story of the day.

Media reporting on this issue was prominent and widely discussed. The nationality of the purchasers was mentioned – but mostly only  in passing.

Criticism, of which there was plenty,   rested on two major points,

  1. Loss of profits overseas,
  2. Loss of sovereignty, and the dominance of our FTA with China over local decision-making.

Both are critical issues that have a real bearing on our country’s future.

With regards to Point #1 – profits lost overseas – Green Party Agriculture spokesperson Steffan Browning said,

As food prices rise globally, selling off our productive land − such as the Crafar farms − to overseas bidders is economic folly. Foreign ownership of the Crafar farms means that the profits will flow overseas, adding further to our current account deficit. In the 12 months to September 2011, $15.2 billion flowed out of NZ to overseas owners of NZ companies and debt.” – Source

This is an issue of considerable weight, considering that New Zealand’s credit rating was downgraded last year by two credit-ratings agencies.

Anything that increases the outflow of profits from New Zealand worsens our current account.

The question then becomes – why allow it to happen if we can avoid it? Especially since we will end up paying for offshore investors’ profits, by way of increased interest rates.  Our current account deficit matters – especially when it impacts on businesses and home owners via  the interest they pay on their loans.

With regards to Point #2.  John Key stated,

And had they turned it down on the basis simply of being Chinese on their desk it would have been not only be unlawful but unacceptable.” – Source

And in the NZ Herald,

Mr Key also pointed to the Free Trade Agreement with China negotiated by the former Labour Government that contained a clause known as the Most Favoured Nation status.

That meant Chinese investment in New Zealand could not be treated differently to any other country.” – Source

So if it is true that China (or any other nation for that matter) has a “Most Favoured Nation” status, and that they are able to compete with local New Zealanders for land, businesses, contracts, etc, then I think we have a problem.

For one thing, it seemingly makes Parliament and elections an irrelevancy if we cannot restrict purchases of our assets to New Zealanders only..

Secondly, no New Zealander can hope to compete with rich overseas investors, should they have a mind to bid for an asset. Michael Fay is one of New Zealand’s richest men – and his consortium was outbid by Shanghai Pengxin by (reportedly) $30 million.

But most importantly, FTA’s are not democratic institutions. No New Zealander voter for it. Very few had a hand in agreeing to it.  Yet our FTA with China appears to take pre-eminence over Parliament?

That is a dangerous position for New Zealand to be in. Especially when we possess natural resources that other nations may covet. Our naivete may yet be our down fall.

Up until 7pm on Friday, the debate had been framed – for the most part – in economic and nationalistic terms.

Then, Maurice Williamson (Minister for Land Information/ Overseas Investment Office) and Cedric Allan (spokesman for Shanghai Pengxin) were both interviewed on TV1′s “Close Up“, that night,

.

[click on image]

.

Williamson succeeded in re-framing the debate over the Crafar deal. From economic and national sovereignty, he turned it into a race-based debate.

Williamson said,

“…New Zealanders were happy for Shania Twain to own 23,000 hectares or whatever.” – Williamson, 6.04

Actually, that’s just not true. Minister Williamson has either forgotten, or is fibbing,

.

Full Story

.

Williamson continued,

When the Americans, a huge number of Americans,  were buying it [land], not mutter. Not a murmur. Not a whisper from all of your opponants out there. But as soon as the word ‘Chinese’  was mentioned, we were opposed to it. And I have to say  that is bordering more on racism than it is on xenophobia.”  – Williamson, 6.11

The charge is repeated by agri-journalist, Richard Rennie,

We’re talking tens of thousands of hectares bought by the Italians, the Germans, even the Brits and Americans. And yet we haven’t heard a murmur from anyone in New Zealand about that.” – Source

Again, none of it is true,

.

.

“… I didn’t hear this level of protest when huge tracts of land was being sold under the Labour government…  ” – Williamson, 6.30

Then Williamson contradicted his 6.04 statement,

Well of course the public don’t like any of our land being sold to foreigners and I understand that...” – Williamson, 8.56

Maurice Williamson had been well-prepped by his media advisors. Instead of being drawn into a debate over economics, he had succeeded in reframing the issue as one of racism. And most liberal minded New Zealanders would think twice before uttering a criticism that might be construed as racist. (Those in our society who are already racist wouldn’t care a hoot and would probably vote ACT or National anyway. They are not Williamson’s intended audience.)

This is where the racism/xenophobia meme started: Friday evening, on “Close Up“, by Maurice Williamson.

Even when  we finally got to the nub of the truth, about China’s actual long-term goals, the real point by now had been lost amidst Williamson’s echoing cries of  ‘racism!’.

For the record, Shanghai Pengxin representative, Cedric Allan said,

China is looking for energy, it’s looking for water, it’s looking primarily for food…” – 7.22, Allan

Of course it is.  And the OIO decision had nicely  set in concrete China’s very long-term goals of securing food-supplies for the future,

The conditions

…Milk New Zealand must use reasonable endeavours to assist Landcorp to extend its business to, and market its products, in China” – Source

Pengxin announced in April 2011 after launching its bid for the farms that it planned to increase milk production from the Crafar farms by 10% and wanted to capture a bigger share of the Chinese market with branded, dairy-based consumer products. It said it planned to spend more than NZ$200 million to buy and upgrade the farms. It then planned to invest a further NZ$100 million on marketing cheeses, ice creams and baby formula for the Chinese market.” – Ibid

Is there anything wrong with increasing dairy exports to China?

Normally, no.  Fonterra has been developing and building our exports to the Chinese market for the past decade. With revenues of nearly $20 billion in 2010, it is one of our major industries and export earner.

But, as mentioned before, any export-revenue to China by Shanghai Pengxin-owned  farms will not come to New Zealand. They will end up in offshore bank accounts, and will be of little benefit to New Zealanders. In fact, most of the profits will vanish off-shore just as the dairy products will.

.

And topped off with some rich irony.

.

The Right have been leading the charge to support the Shanghai Pengxin deal, and accusing detractors of naked racism…

Meanwhile, the Left has countered with (credible) concerns about loss of export income…

The Right are not usually renowned for sympathatic understanding of racism against ethnic groups. They are usually more relaxed with “trashing the treaty”, mixed with a bit of Maori bashing, as  their usual ‘sporting activity’. After all, the right wing party ACT was adamant that Maori were not going to get tangata whenua-based seats on the Auckland Super Council.

The Left, on the other hand are not usually in a position where they find themselves arguing on behalf of economic benefits; current accounts; export earnings; and sound commercial practices. What next – Socialist International on the Board of Goldman Sachs? (Actually, they might not do a half-bad job, to be honest… )

.

But the final verdict?

.

Lies with the voting public.

Somehow, I doubt if the public are terribly reassured by Key’s pronouncement on this matter,

If we saw a significant buy-up of New Zealand farms, then the Government’s response would likely be to further toughen the regulations or the Overseas Investment Act, but at this point, we’re not really seeing that.” – Source

When John Campbell asked Dear Leader what constituted “a significant buy-up of New Zealand farms” (7.47) – Key was left floundering. He couldn’t name a figure. He could only waffle about vague trends. However, by the time a “trend” is established, how much of a mess will we have created for ourselves?

How much is too much?

And will our elected representatives have the wit to know when to say, “No more”?

.

The Law

Overseas Investment Act 2005

- Section 16

- Section 17

- Section 18

The OIO Decision

Decision required under the Overseas Investment Act 2005: Milk New Zealand
Holding Limited

Previous Blog entries

The road to poverty?

The Great NZ Sell-Off Continues

How to lose $5.3 billion dollars without any effort at all

The second colonisation of New Zealand

The Crafar Farms – Why the delay from the OIO?

Farms, politicians, and emails

Competing against the Chinese Government…

Is this man a complete fool?

As predicted

Land Sales – a Sorry Saga of Sheer Stupidity

Mum & Dad investors?

.

.

Mum & Dad investors?

30 January 2012 4 comments

.

.
John Key laments that he could do nothing to stop the sale of the Crafar farms to overseas investors because of our Free Trade Agreement with China.  Shanghai Pengxin had as much right to bid for, and have their bid accepted, as any other bidder in this country,

.

Full Story

.

Key says that attempting to halt the sale would have meant the Chinese suing us for breaching the FTA, as he was quoted in the Otago Daily Times,

.

“Ministers could have overturned that decision, but there were no reasons to do so. The OIO correctly interpreted the legislation, and had they turned it down simply on the basis of being Chinese, it would not only be unlawful but unacceptable and would have been overturned in the courts.” ” – Source

.

In which case, how will John Key ensure that Kiwi “mum and dad” investors are allowed first option to buy shares in soon-to-be privatised state power companies – without Chinese demanding the same right to bid,

.

Full Story

.

Won’t we be sued by China  if “mum & dad” investors get first preference over countries with which we have a FTA with?

It will be interesting to see how our Dear Leader resolves this little dilemma.

.

.

Land Sales – a Sorry Saga of Sheer Stupidity

29 January 2012 10 comments

That was then…

27 July 2010

John Key stating that he could not see how foreigners owning New Zealand farms would be in our best interests, and he would not want to see New Zealanders “tenants in their own country“…

.

[click on image]

.

This is now…

27 January 2012

John Key explaining why it is a good thing for overseas investors to be buying up New Zealand farmland – and hey, anyway, government is “powerless” to stop these buy-ups.

.

[click on image]

.

Which raises two important issues;

  1. Why should anyone trust a single word to escape from John Key’s mouth? That man has demonstrated on so many occassions that he simply cannot be trusted – he will say one thing, and then later, do the complete opposite.
  2. When did New Zealand cede sovereignty to overseas corporate interests? I can’t remember this ever being discussed or debated.

Have we actually signed away our sovereignty; our right to determine who we can or won’t sell to?

.

.

If  the NZ-China Free Trade Agreement – that John Key refers to – is constraining us from being unable to  stop the sale of the Crafar Farms to Shanghai Pengxin,  (and remember – this is John Key talking) – then we need to re-visit those Agreements.

Because, as sure as day follows nights – the Chinese do not permit their land to be sold to foreigners. So why are we being coerced into selling our land to them?!?!

Does anyone know the answer to this very simple question?

Because I sure as hell don’t.

.

***

.

In reply to Williamson & Key…

Much has been made of the nationality/ethnicity of the buyers of the Crafar Farms. National’s John Key, Maurice Willamson, et al, have played the “race card” in their favour, trying to paint criticism of the buy-up as somehow “racist”.

Yet, as media reports show, the gradual alienation of our land to foreigners has been carried out by various nationalities…

.

2002

.

.

2004

.

.

2005

.

.

2009

.

.

2010

.

.

2011

.

.

.

.

.

.

2012

.

.

And yet, as recently as April, 2010, the Real Estate Institute of NZ was warning us that “overseas investment would compete with young farmers“,

.

.

When even a very wealthy man such as Sir Michael Fay cannot outbid a Chinese-government backed buy-up of New Zealand farmland – then we are in very serious trouble. No young New Zealander can hope to compete with German corporations; American billionaires;  Chinese government-corporate proxies.

In effect, we are witnessing the forfeiting of our farming heritage to our children. And we are allowing it to happen. If this is not sheer stupidity, then I don’t know what it.

This is why the governments of Middle East oil-producing regions re-nationalised their oil fields. Allowing oil companies to own the oil fields; extract the oil; process it; and sell it, allowed companies like BP, Shell, ExxonMobil, etc, to reap billions in profits.

Meanwhile, the countries upon which the oil fields rested made only a small amount in “royalties”.

The Arabs wised up very quickly that they were being ripped off.

New Zealanders, it seems, still don’t understand what is happening.

.

The Law

Overseas Investment Act 2005

- Section 16

- Section 17

- Section 18

The OIO Decision

Decision required under the Overseas Investment Act 2005: Milk New Zealand
Holding Limited

Previous Blog entries

The road to poverty?

The Great NZ Sell-Off Continues

How to lose $5.3 billion dollars without any effort at all

The second colonisation of New Zealand

The Crafar Farms – Why the delay from the OIO?

Farms, politicians, and emails

Competing against the Chinese Government…

Is this man a complete fool?

As predicted

Additional

NZ Herald: The $47 billion rural hangover

NZ Herald: For sale: The Kiwi farm

Tim Watkin: Crafar Farms deal ticks the boxes – but where does it end?

Tumeke:  Why we need to sell Crafar farms to China

Germans dominate small dairy buys

RNZ: 2% of pastoral sector land  sold to buyers from overseas

Email addresses

Prime Minister, John Key: john.key@parliament.govt.nz

Letters to Editor, Dominion Post:  letters@dompost.co.nz

Letters to Editor: Waikato Times: editor@waikatotimes.co.nz

Letters to Editor, NZ Herald: letters@herald.co.nz

Letters to Editor, The Press (ChCh): letters@press.co.nz

Letters to Editor, ODT: odt.editor@alliedpress.co.nz

.

.

As predicted…

27 January 2012 2 comments


As predicted in my post, Farms, politicians, and emails ,

This blog predicts that National will allow the OIO to permit the sale of the Crafar farms to Shanghai Pengxin, and will try to “sweeten” the deal with sale-conditions designed to satisfy public concerns.” – 24 January

.

Source

.

It is little wonder that this decision was released some nine months after the application was lodged with the Overseas Investment Commission – John Key knew that if this decision was released before November, that they would have lost the election.

This is the sort of manipulative shyster we have as our Prime Minister.

.

.

Is this man a complete fool?

.

.

5 July 2010

As a general and broader principle I think New Zealanders should be concerned if we sell huge tracts of our productive land.

“Now, that’s a challenging issue given the state of the current law and quite clearly it’s evidentially possible and has been achieved that individual farms can be sold. Looking four, five, ten years into the future I’d hate to see New Zealanders as tenants in their own country and that is a risk I think if we sell out our entire productive base, so that’s something the Government will have to consider.” – John Key

.

26 January 2012

What ministers are looking at is: Does the bid by this Chinese entity meet the regulations. If it does, they have no grounds to turn it down because if they do turn it down, then they would be subject to judicial review and they would almost certainly lose.”

“If we saw a significant buy up of New Zealand farms then the Government’s response would likely be to further toughen the regulations or the Overseas Investment Act. But at this point, we’re not really seeing that.”

A deal between Pengxin and Landcorp “could be” a good commercial proposition for the state-owned company. – John Key

.

It appears that the John Key of July 2010 is not the same John Key of January 2012. Somewhere along the way, aliens have abducted the 2010 John Key and replaced him with a doppelganger. Dang dastardly, these aliens. (Please take away that damned  clone. And you can keep the original.)

The following story is full of “Keyisms” – half-truths, mis-representations, and fudging the issue,

.

Full Story

.

Some of his statements are breath-taking in “bending” the truth,

Prime Minister John Key says he would not have a problem with state-owned Landcorp running the 16 Crafar farms under Chinese ownership. That would “not necessarily” be a case of New Zealanders becoming “tenants in their own land”, he said.”

Whut?!

Prime Minister, the definition of “tenant farmer” is as follows,

A tenant farmer is one who resides on and farms land owned by a landlord. Tenant farming is an agricultural production system in which landowners contribute their land and often a measure of operating capital and management; while tenant farmers contribute their labor along with at times varying amounts of capital and management.” – Wikipedia

Ergo; if Shanghai-Pengxin (or any other foreign investor) owns the land, and Landcorp works the land – then Landcorp is a tenant farmer.

Is there any part of that simple truism that escapes our Prime Minister?

If so, I can ask some school children to draw him some pretty pictures in coloured crayons, a-la “Seven Days“.

John Key then says,

He “had a feeling of what might happen”. “

Yeah. I bet he does.

Key goes on,

“The Government is not in one sense the arbiter of the decision about yes or no for foreign ownership of the existing Crafar Farms – that is a recommendation from the Overseas Investment Office. What the Government’s role is to determine whether the Overseas Investment Office followed the law properly,” Key said. “

To maintain the rural theme of this blog-piece: Bovine excrement!

The OIO’s rules are crystal clear,

Estimated decision times

There is no statutory timeframe within which an application for consent must be decided. However applications generally fall into one of three categories according to complexity with category 3 being the most complex. These categories provide a guide for how long it may take for a decision to be made:

  • Category 1 applications, where the OIO aims to make decisions within 30 working days from the date of registration. Examples include:  (a) applications for consent to purchase significant business assets,
    (b) “sensitive land” decisions delegated to the OIO by Ministers that don’t fall into the categories below,
    (c) variations to existing consents
  • Category 2 applications where the OIO aims to make decisions within 50 working days from the date of registration.  Examples include:  (a) “sensitive land” applications for consent requiring Ministerial consideration e.g. the purchase non-urban land greater than five hectares in size, where it includes or adjoins other sensitive land, such as conservation land, reserves etc
    (b) applications for exemptions.
  • Category 3 applications, where the OIO aims to make decisions within 70 working days from the date of the registration.  Examples include:  (a) applications to acquire an interest in fishing quota,
    (b) applications that involve special land being land that includes foreshore or the bed of a river or lake,
    (c) where the applicant intends to establish a purchasing programme such as a series of land acquisitions in a specific area for a specific project,
    (d) applications in respect of which a third party submission has been received by the Ministers or the OIO,
    (e) applications where the Ministers or the OIO have decided that consultation with third parties is appropriate in considering whether or not to grant consent.

Note that these targets apply to high quality, well prepared and analysed applications, and excludes the time where the OIO is waiting for the applicant to provide further information and the time for Ministers to consider and make decisions on relevant applications.

Source

So John Key is trying to pull a fast one in attempting to evade responsibility for any decision making on this issue.

Applications for “sensitive land” requires ministerial consent. It’s there, in black and white (and highlighted in red). If Key doesn’t understand the workings of the OIO, he has no business being Prime Minister of New Zealand.

Key waffles on,

“What ministers are looking at is: Does the bid by this Chinese entity meet the regulations. If it does, they have no grounds to turn it down because if they do turn it down, then they would be subject to judicial review and they would almost certainly lose.”

No, Prime Minister. Parliament is sovereign. Parliament makes the rules – not our Chinese (or American or Australian or German) cuzzies.

If we don’t want to sell our land – we don’t have to. Just as the Chinese Government has the ‘smarts‘ to have precisely the same laws in place in their country.

If you are telling us that we have lost control over the sale of our own land, to a foreign power, then we are in serious trouble,  Mr Prime Minister.

The Government had spent “a long time tightening up the law” around foreign ownership of land.”

Has it? Has it really?! Because I’ve emailed the government on precisely this issue and have yet to receive a reply of any description.

There is no indication whatsoever that this government has “tightened” any aspect of “foreign ownership of land”. (Except in JohnKeyland.)

Labour had negotiated the free trade agreement with China, which had given the Chinese the same rights to invest in New Zealand as the British, American, German or Australian investment.

In which case, Mr Prime Minister, why are the Chinese able to deny foreigners from buying land in China?

We cannot say we are not going to accept a bid because someone is Chinese. We can say it’s because they don’t meet certain regulations and conditions in the Overseas Investment Act but we can’t say it’s because they’re Chinese.”

Which is why many critics are also opposed to German, American, Australian, etc, buyers of our farmland. The German buy-up of Southland is also cause for concern.

We always have the power to disagree with the Overseas Investment Office but we couldn’t disagree because we don’t like the ethnicity of a buyer. We’d have to say it doesn’t meet these regulations or these terms.”

There was “a degree of subjectivity” in the tests but it was “for the most part, pretty clear cut“.”

There are plenty of reasons why Government can decline an application. Economic. Social. Environmental. Ethnicity is a straw-man argument which only John Key seems to be dredging up.

“If we saw a significant buy up of New Zealand farms then the Government’s response would likely be to further toughen the regulations or the Overseas Investment Act. But at this point, we’re not really seeing that.”

The sale of the Crafar Farms was “a significant transaction in terms of a one-off purchase” but in the overall context, it was not.”

One wonders what constitutes “a significant buy up of New Zealand farms“? Any sensible person would look at sixteen farms as being fairly significant.

If not – what is “significant”? 17 farms? 20? 50? Half the country?

A deal between Pengxin and Landcorp “could be” a good commercial proposition for the state-owned company.

With that stastement, John Key has just made a complete 180-degree ‘flip flop’, from decrying being a tenant in our own country – to being a “good commercial proposition”.

This is the man who is our Prime Minister. One who changes his values and position on issues, to suit circumstances and monetary gain. The term “amoral” only barely describes a politician of Key’s nature.

.

 

 

.

.

Competing against the Chinese Government…

26 January 2012 6 comments

Cont’d from: Farms, politicians, and emails

.

Full Story

.

New Zealanders should take note of the following, which was reported in the above article,

.

“It is understood Pengxin has been conditionally approved to buy the farms, and management by Landcorp is thought to be among the conditions.

“We are in play, as we speak, doing due diligence on those farms,” Mr Kelly said. “We will then attempt to enter into a management contract. If we can’t, then that’s the end of the story. It’s extremely busy, but we’ve been asked by Pengxin to do our best and that’s what we’ll do.”

There was minimal risk to Landcorp in the deal. The only capital investment was likely to be in farm equipment and stock, which could all be absorbed back into the business if things fell apart.

New commercial opportunities in China could also open up later on as a result of the deal, Mr Kelly said.

Investigations into Pengxin are believed to have shown it to be a reputable trader with access to cheap credit from the Chinese Government.

“They’re not a Mickey Mouse outfit. What they’re doing is, without any question, advancing Chinese Government policy,” a source familiar with the company said.” - Ibid

.

There we have it.

The Chinese government is pursuing an agressive policy to buy up farmland where ever possible, to pursue it’s own narrow, nationalistic agenda.

To facilitate this form of commercial neo-colonialism, it is funding nominally “private” companies (eg; Shanghai Pengxin) with cheap loans – loans that New Zealand companies do not have access to. These “private” companies are acting as de facto arms of the Chinese Government.

The questions that remain to be asked are;

  1. What is the policy of the Chinese Government in buying up farmland around the world? What is the purpose of this massive buy-up?
  2. Will our government accede to the Chinese government and permit the alienation of our own productive farm-base to a foreign government, pursuing unknown, hidden agendas?

In pursuing their agenda, New Zealanders cannot hope to compete with the vast resources of a major economic power. If one of New Zealand’s richest men (Michael Fay) cannot out-bid a foreign investor – then there is no way that ordinary Kiwis can compete.

We will be out-bid every time a foreign buyer (whether German, Americam, Chinese, etc) wants a piece of our land.

The result will be that that, in years and decades to come, New Zealanders will become tenants in their own country.

Landcorp is setting itself up to be the first tenant in a foreign own farm.

Will this  be our future?

And will  we permit it to happen?

.

Email addresses

Prime Minister, John Key: john.key@parliament.govt.nz

Letters to Editor, Dominion Post:  letters@dompost.co.nz

Letters to Editor: Waikato Times: editor@waikatotimes.co.nz

Letters to Editor, NZ Herald: letters@herald.co.nz

Letters to Editor, The Press (ChCh): letters@press.co.nz

Letters to Editor, ODT: odt.editor@alliedpress.co.nz

.

.

Farms, politicians, and emails…

24 January 2012 3 comments

.

.

January 14

To re-cap:

The second colonisation of New Zealand

The Crafar Farms – Why the delay from the OIO?

The time-line thus far;

5 October 2009: Crafar Farms placed into receivership.

22 December 2010: Government  blocks  bid by Natural Dairy to buy the 16 Crafar farms on ‘good character’ grounds.

27 January 2011: KordaMentha accepts offer from Pengxin International Group Ltd to buy Crafar Farms.

18 April 2011: Shanghai Pengxin lodges application with the Overseas Investment Office (OIO) to buy the Crafar farms.

26 September 2011: Crafar farms receiver KordaMentha  rejects a conditional NZ$171.5 million offer for 16 central North Island dairy farms from a group led by controversial former merchant banker Michael Fay.

To date, nothing further has been heard on this matter.

I have emailed Bill English again,

.

from: [email]
to: bill.english@parliament.govt.nz
date: Sat, Jan 14, 2012 at 5:59 PM
subject: Crafar Farms

Sir,

Shanghai Pengxin lodged an application with the Overseas Investment
Office (OIO) on or around 18 April 2011, to buy the Crafar portfolio
after Natural Dairy’s application was rejected.

Normally, applications take up to 50 to 70 working days to process, as
per OIO guidelines. (Ref:LINZ, Application Assessment & Timeframes,
Estimated decision times,
http://www.linz.govt.nz/overseas-investment/applications/assessment#estimated)

It has now been nine months since Shanghai Pengxins lodged it’s application.

As the Minister responsible for the OIO, can you explain why Shanghai
Pengxins’ application has not yet received a decision? I have written
to you previously on this matter, and received on an acknowledgement
of receipt of email, but nothing further.

Information on this matter would be appreciated.

Regards
-Frank Macskasy

.

It is my guess that the decision by the OIO was deferred last year  because of the General Election. The sale of the Crafar Farms is a contentious issue, to put it mildly, and would most likely  cost National the election had the OIO granted Shanghai Pengxin’s application.

I am betting that the OIO will make it’s decision in February or March, and will grant consent. I’m further “betting” that the consent will be made with some sort of “sweetener“, such as Landcorp managing the farms.

The result, however will be the same;  productive farmland alienated into foreign control; valuable produce shipped off to Chinese consumers; and profits lost to Chinese investors.

Gain to New Zealand? A few dozen employees’ salaries.

I am reminded of John Key’s pronouncement on foreign ownership of our productive landbase,

.

.

The sell-off of our country continues.

That, coupled with the on-going de-unionisation of our workforce, is further indication of where our New Right government is heading.

Truly, we are in the midst of an ideological “civil war”.

.

UPDATES

January 25

No response has been recieved from Bill English or any other Minister on this issue. The only conclusion I can reach is the following;

  • this government is ducking for cover,
  • this government intends to allow the Shanghai Pengxin purchase to proceed,
  • this government instructed  the OIO to delay making a decision on Shanghai Pengxin’s application, because  of the sensitivity of this  as an election issue,
  • this government has manipulated and interfered with the OIO process – just as National’s appointee to the Board of NZ on Air attempted to interfere with the broadcasting of a documentary, because it was considered as ‘embarressing’ to National,
  • this government has accepted donations from Chinese businessmen connected to Shanghai Pengxin,

.

Full Story

.

This is not the first time that National has benefitted financially from doing questionable “deals”,

.

Full Story

.

Full Story

.

This blog predicts that National will allow the OIO to permit the sale of the Crafar farms to Shanghai Pengxin, and will try to “sweeten” the deal with sale-conditions designed to satisfy public concerns.

.

.

Now that the election is over…

29 November 2011 2 comments

… what is the bet that the Overseas Investment Office (OIO) is about to make public their decision on the Chinese offer to buy the Crafar farms?

The cynic in me wonders if the Minister responsible for the OIO had a quiet chat with  Chief Executive, Colin MacDonald, on this issue?

More here,

The second colonisation of New Zealand

The Crafar Farms – Why the delay from the OIO?

.

.

The Crafar Farms – Why the delay from the OIO?

14 November 2011 2 comments

.

.

Continued From

The second colonisation of New Zealand

.

To re-cap:

5 October 2009: Crafar Farms placed into receivership.

22 December 2010: Government  blocks  bid by Natural Dairy to buy the 16 Crafar farms on ‘good character’ grounds.

27 January 2011: KordaMentha accepts offer from Pengxin International Group Ltd to buy Crafar Farms.

18 April 2011: Shanghai Pengxin lodges application with the Overseas Investment Office (OIO) to buy the Crafar farms.

26 September 2011: Crafar farms receiver KordaMentha  rejects a conditional NZ$171.5 million offer for 16 central North Island dairy farms from a group led by controversial former merchant banker Michael Fay.

.

Since Shanghai Pengxin’s lodgement in April to apply for permission to buy the farms, the Overseas Investment Office (OIO) has not yet arrived at a decision.

This is extraordinary, as the OIO sets a target of 50 to 70 working-days to  process applications. It has now been seven months.

As the OIO states on it’s own website,

.

Estimated decision times

There is no statutory timeframe within which an application for consent must be decided. However applications generally fall into one of three categories according to complexity with category 3 being the most complex. These categories provide a guide for how long it may take for a decision to be made:

  • Category 1applications, where the OIO aims to make decisions within 30 working days from the date of registration. Examples include:(a) applications for consent to purchase significant business assets,
    (b) “sensitive land” decisions delegated to the OIO by Ministers that don’t fall into the categories below,
    (c) variations to existing consents
  • Category 2 applications where the OIO aims to make decisions within 50 working days from the date of registration.  Examples include:(a) “sensitive land” applications for consent requiring Ministerial consideration e.g. the purchase non-urban land greater than five hectares in size, where it includes or adjoins other sensitive land, such as conservation land, reserves etc
    (b) applications for exemptions.
  • Category 3applications, where the OIO aims to make decisions within 70 working days from the date of the registration.  Examples include:(a) applications to acquire an interest in fishing quota,
    (b) applications that involve special land being land that includes foreshore or the bed of a river or lake,
    (c) where the applicant intends to establish a purchasing programme such as a series of land acquisitions in a specific area for a specific project,
    (d) applications in respect of which a third party submission has been received by the Ministers or the OIO,
    (e) applications where the Ministers or the OIO have decided that consultation with third parties is appropriate in considering whether or not to grant consent.

Note that these targets apply to high quality, well prepared and analysed applications, and excludes the time where the OIO is waiting for the applicant to provide further information and the time for Ministers to consider and make decisions on relevant applications.

Source

.

One cannot help but suspect that, because it is Election Year, that this government has delayed a final decision on Shanghai Pengxin’s application. Accordingly, I have written to Bill English, the Minister in charge of the OIO,

.

from:    [email]
to:    bill.english@parliament.govt.nz
date:    Mon, Nov 14, 2011 at 11:27 PM
subject:    Crafar Farms

Sir,

Shanghai Pengxins lodged an application with the Overseas Investment Office (OIO) on or around 18 April, to buy the Crafar portfolio after Natural Dairy’s application was rejected.

Normally, applications take up to 50 to 70 working days to process.

It has now been seven months since Shanghai Pengxins lodged it’s  application.

As the Minister responsible for the OIO, is there a reason as to why Shanghai Pengxins’ application has not yet received a decision? Or is the decision being deferred until after the election because of it’s sensitivity?

Information on this matter would be appreciated.

Regards
-Frank Macskasy

from:    B English (MIN) B.English@ministers.govt.nz
to:    [email]
date:    Tue, Nov 15, 2011 at 12:19 PM
subject:    RE: Crafar Farms

Dear Frank Macskasy

On behalf of the Hon Bill English, Minister of Finance thank you for your recent email regarding Crafar Farms.  Your letter has been passed on to the Minister for his information.  
As the issues you have raised, however, fall within the portfolio responsibilities of Hon Kate Wilkinson, I have also referred a copy of your letter to her for consideration and reply.

Kind regards

Katy Greco-Ainslie
Private Secretary
Hon Bill English
Deputy Prime Minister
Minister of Finance
Minister for Infrastructure

from:    [email]
to:    “B English (MIN)” <B.English@ministers.govt.nz>
date:    Tue, Nov 15, 2011 at 3:46 PM
subject:    Re: Crafar Farms

Kia Ora Katy,

I am unsure why you have placed this matter before Ms Wilkinson. Her portfolios are,

    * Minister of Conservation
    * Minister of Labour
    * Minister for Food Safety
    * Associate Minister of Immigration

The Overseas Investment Office is responsible to the Minister of  Finance, Bill English, or Minister for Land Information, Maurice Williamson, as per the official LINZ website, and Parliamentary websites: http://www.linz.govt.nz/overseas-investment/about-oio/legislation-delegations

Considering that the issue of the sale of Crafar farms may fall into “sensitive lands” category, this matter would most likely fall under Bill English’s jurisdiction.

Regards,
-Frank Macskasy

.

Uh oh…  it appears that the Minister’s office has just given me the “brush off”!

from    B English (MIN) B.English@ministers.govt.nz
to    [email]
date    Tue, Nov 15, 2011 at 3:46 PM
subject    Thank you for your email.

On behalf of Hon Bill English, thank you for your email.  

Please be assured that all correspondence is read and noted by this office. Where the Minister has portfolio or MP for Clutha-Southland responsibilities for the issues raised, a response will be sent to you in due course.  

While the Minister considers all correspondence to be important, if your email falls outside of his portfolio or electorate responsibilities, or expresses a personal view, then your opinion will be noted and your response may be tranferred to another office or there may be no further response to you.

Thank you for taking the time to write.  

Authorised by B English, 15 Main Street, Gore.

It is my guess that this government has deliberately stalled Shanghai Pengxin’s application to to OIO, and that consent will not be given until after the Election. National understands that the issue of farm sales to overseas investors is not well-liked by the New Zealand public and that on this issue alone, they could lose the election.

I do not expect a reply from Bill English.

I do expect that permission  for the Crafar Farms to be sold to Shanghai Pengxin will be given next year.

This is the government that New Zealanders expect to re-elect…

.

.

Labour on farm sales – NOT good enough!

21 October 2011 1 comment

.

Full Story

.

Labour has stated that,

A Labour government would ensure sales were declined unless potential foreign buyers of farm or forestry land also invested in new processing or other related jobs.Source

Sorry, Mr Goff, but that is totally unacceptable and is merely ‘tinkering’ with the problem.

The sale (or leasing) of our productive farmland means that we lose profits to overseas investors. It means that a foreign owned farm will (a) export their produce (b) make a profit (c) remit much of that profit back to overseas investors, who look for returns on their investment.

It means that New Zealand farmland is priced out of reach of our own people, who cannot hope to compete with Americans, Germans, Chinese, etc. The purchase of the Crafar  farms by Shanghai Pengxin’s over a Michael Fay-led local consortium should ring alarm bells in our heads.  (More here)

Labour needs to lift it’s game on this issue.

There has to be a total ban on the sale/lease of farmland to anyone who is not a New Zealand citizen.  Anything less will ultimately undermine our long term prospects for wealth-generation and prosperity.

We would end up tenants in our own country.

.

.

The second colonisation of New Zealand

1 October 2011 9 comments

This recent story in the media should give us all cause for concern,

.

Full Story

.

I should start with a disclaimer: I hold no real enthusiasm nor liking for  Michael Fay’s method of operation. He and his colleague, David Richwhite, gutted NZ Rail during their tenure as part-owners of that asset.  (The  New Zealand Securities Commission  investigation into Fay & Richwhite’s alleged insider trading – and whilst no prosecution resulted – did result in an out-of-court settlement, where they paid NZ$20 million to the Securities Commission in June, 2007. )

As taxpayers, we are still paying for the upgrading and  maintenance of railways that was neglected during 15 years of private ownership.

However, the reality is that Michael Fay is leading a New Zealand consortium to buy the 16 Crafar farms. These farms amount to 11,000ha of property throughout the central North Island.   Their transfer into foreign control would be a significant loss to the NZ economy.

There are three  major issues highlighted by this story, and another,  that convincingly illustrate why overseas investors should be permanently denied ownership (or even  leasing) of our productive farmland.

Issue 1:

“Receiver KordaMentha has formally declined the Fay group’s $171.5 million offer for the 16 central and lower North Island farms, saying the conditional offer it has accepted from Chinese group Shanghai Pengxin “was by far the best offer at [that] time and remains so today”…

… “Our offer is at a price we firmly believe makes sense it that we are paying the right price for the long-term farming future of these properties,” the group’s negotiator Steve Bignell said. “ Source

This illustrates the risk of permitting foreign interests to bid for our farms. Foreign investors (generally) have very, very deep pockets. When even a millionaire such as Michael Fay can be out-bid  – we need to ask ourselves how ordinary New Zealanders can compete with foreign investors.

In a bidding war, New Zealanders will always lose. Our sons and daughters have zero chance and nil opportunities to own a slice of our country’s natural wealth, when faced with the near-limitless resources from overseas buyers.

We may not like Michael Fay, but  at least he represents an opportunity to keep the Crafar farms – and the wealth they create – in local ownership. That he is unable to acquire these properties because he has been out-bid to the tune of $38.5 million dollars is disturbing.

I believe it is a sign of things to come.

Issue 2:

“Over a certain price level, these farms don’t work.”Ibid

If true, then the question that begs to be asked is: why? Why are overseas investors willing to pay inflated prices for our productive farmlands?

The answer is not very complicated nor obscure.

The human population on Planet Earth has reached 7 billion.

By 2050AD it is estimated that the population will reach 9 billion.

All 9 billion will require food – lots of it.  And unfortunately for the Human race, there is only a limited amount of arable land on this little planet of ours. With ongoing desertification, arable land is reducing each year. Soil erosion  is another factor in this problem.

On top of that, as populations increase, so does pressure on food supply. In countries such as India and China, as their middle classes grow and become  more affluent, they will demand access to more and better food.

Countries such as New Zealand offer sources of clean, well-processed, safe, reliable, sources of protein.

In other words: supply and demand.

Just as the U.S. has cornered oil supplies in the Middle East, growing economies in the East and elsewhere will look to “cornering” nett-food suppliers. It is interestimng that the Prime Minister, John Key, alluded to this matter at a public meeting in Lower Hutt, on 24 May. He stated that China’s centralised, autocratic government could not afford to risk disruption to their domestic food production; a hungry population; and a subsequent “Arab Spring”-style uprising.

No government on Earth could withstand one billion hungry people in revolt.

Key hinted that China’s acquisition of land in Africa and here in New Zealand was based on a strategic need to secure food sources.

If true, money is no object. After all, you cannot feed money to hungry mouths.

In which case, it is little wonder that Shanghai Pengxin’s offer for the Crafar farms is “over a certain price level“. China is not interested in selling the food for profit. It is seeking the food for it’s own population. Because by 2050, one billion Chinese will have eight billion other competitors seeking the same food source.

This is what ‘Shanghai Pengxin‘ spokesman Cedric Allan said,

“…  while it initially intends to continue supplying Fonterra with raw milk investment plans include working “in partnership” with an existing processor to develop baby formula, ice cream and cheeses suitable for Asian markets.

“We do not intend to be simply a customer of a dairy processor.

“To ensure the processor can produce long term and if they needed to increase their capacity to do so then we could help them with that.

“We have no wish to own or control a processor, other than to make sure they are in a position to provide surety long term.” “ Source

Again, no individual New Zealander(s) can hope to compete against  that kind of long-term acquisition-strategy.

Issue 3:

Shanghai Pengxin has lodged its application with the Overseas Investment Office (OIO) to buy the Crafar portfolio after Natural Dairy’s application was rejected.” – 18 April 2011 Source

The OIO (Overseas Investment Office) usually takes between 30 working days (Category 1 applications) to 70 working days (Category 3 applications). Source.

It has been approximately 115 working days since Shanghai Pengxin  lodged its application with the Overseas Investment Office.

One can only assume that,

(a) the OIO has mis-placed Shanghai Pengxin’s application (have they looked behind their cafetaria sofa?).

(b) the OIO has been “requested” by the Minister-in-charge to “review” Shanghai Pengxin’s application. And to report back sometime after the election.

The sale of the  16 Crafar farms is politically explosive. It would do to National what “Corngate” did to Labour in 2002. National cannot risk this matter affecting their re-election chances in November.

Which is why I am betting that,

1. We will not see a decision from the OIO any time this year.

2. The Fay-led consortium will fail.

3. The Shanghai Pengxin application will be approved.

The sale of New Zealand will accelerate, and with the apathetic acceptance of the majority of New Zealanders.

Just how gullible are we?

.

.

***

.

+++ Updates +++

.

Source

Fay said the group of farmers had “serious concerns” about the state-owned farming corporation’s role with Shanghai Pengxin, whose bid for the 16 in-receivership dairy farms is conditional on getting Overseas Investment Office consent.

“Landcorp is well known in the farming community for buying farm land in competition with locals – effectively using taxpayers’ money to outbid those same taxpayers,” Fay said.

Fairfax revealed recently that Landcorp was in preliminary talks with Pengxin for the job of managing or sharemilking the farms if the Chinese company is successful in buying them.

It has been nearly seven months since Pengxin applied to the OIO for consent.

Fay said Landcorp seems to have become “utterly confused” about its purpose and could have allowed itself to be used as a pawn in the deal – “just to give the Chinese bids an acceptable local face”.

Fay’s group has offered receivers KordaMentha $171.5 million for the farms. Its bid has been declined as too low but the farmers consider their offer “still live”.

Through its OIA request, the farmer group has asked Landcorp to provide all details of its dealings and correspondence with Pengxin, any correspondence it may have had with the OIO, and all correspondence between Landcorp and an unsuccessful bidder for the Crafar farms, Chinese group Natural Dairy and May Wang’s UBNZ companies.

The farmers say they are making a single bid for the Crafar farms because the receivers require it, but if successful they would split the farms up between them to be owner-operated.

.

The Big Questions that need to be asked here are;

  1. Why is Landcorp – a State Owned Enterprise (SOE) – working with overseas interests rather than local investors and taxpayers?
  2. Is this an acceptable use of taxpayers’ money and resources?
  3. What is the government’s position on a SOE working with a foreign company, against New Zealand investors?
  4. Has Landcorp  offered to work with the Fay-led consortium? If not, why not?

Perhaps it is appropriate for these questions to be put to Landcorp’s Chief Executive, Chris Kelly, and Shareholding Minister, Simon Power?

Especially when, amongst it’s various “Mission Statements”, “Statement of Corporate Intent”, etc, we find the find Objectives that Landcorp is committed to,

“1.1

- To exhibit a sense of social responsibility by having regard to the interests of the community in which it operates and by endeavouring to accomodate or encourage these when able to do so.

1.4

- To provide the shareholders with maximum sustainable returns by;

Meeting social obligations.

5.4  Opportunities, risks and returns affecting or likely to affect Landcorp,

Returns through,

- stabilisation of rural land values.”

Source: State of Corporate Intent 2011-2014 (PDF)

None of the above seems consistent with supporting a foreign-based investor-takeover of New Zealand farmland, instead of a local initiative.

.

from:    [email]
to:         Simon Power <simon.power@parliament.govt.nz>, Chris Kelly <kellyc@landcorp.co.nz>
date:    Thu, Oct 13, 2011 at 12:33 AM
subject:    Landcorp & Shanghai Pengxin

Sir,

According to recent media reports Landcorp  “is in preliminary talks with Pengxin for the job of managing or sharemilking the 16 Crafar  farms if the Chinese company ( Shanghai Pengxin) is successful in buying them.”

Landcorp appears to be supporting Shanghai Pengxin’s bid to purchase the Crafar farms over an offer by a local consortium, led by Sir Michael Fay.

Could you please explain how a New Zealand crown-entity – namely Landcorp, which is owned and resourced by New Zealand taxpayers – can appear to be supporting a foreign bid to gain control of large areas of productive New Zealand farmland; soliciting business from said investors; and thereby undermining a local bid?

Could you please explain how Landcorp can be associated with a foreign investor, instead of local investors, when their Objectives (2011-2014) specifically require Landcorp to be  committed to;

“1.1

- To exhibit a sense of social responsibility by having regard to the interests of the community in which it operates and by endeavouring to accomodate or encourage these when able to do so.

1.4

- To provide the shareholders with maximum sustainable returns by;

Meeting social obligations.

5.4  Opportunities, risks and returns affecting or likely to affect Landcorp,

Returns through,
- stabilisation of rural land values.”

In view of the above stated objectives, it would appear to make better sense if Landcorp were to support the Fay-led consortium, rather than overseas interests. Considering that Landcorp is owned by New Zealand taxpayers, it seems to be a fair expectation that Landcorp support local investors rather than overseas individuals and/or corporations.

I await your response to this matter.

-Frank Macskasy
- Blog-author, “Frankly Speaking”

.

Chris Kelly responded the following day with this response,

.

from:    Chris Kelly kellyc@landcorp.co.nz
to:    [email]
date:    Thu, Oct 13, 2011 at 4:33 AM
subject:    Re: Landcorp & Shanghai Pengxin

Dear Frank M

If and only if Pengxin have OIO approval to buy Crafar farms might Landcorp be involved in managing the farms.
Land corps preferred option was to buy them ourselves.
We would be happy to work with the Fay consortium.We have not been approached by them.
Landcorp has not been in contact with the OIO to assist Pengxin to buy the farms.

Regards, Chris Kelly

.

Which begged the obvious question in return,

.

from:    [email]
to:    Chris Kelly <kellyc@landcorp.co.nz>
date:    Thu, Oct 13, 2011 at 8:52 AM
subject:    Re: Landcorp & Shanghai Pengxin

Dear Chris,

Thank you for your response.

Has Landcorp considered approaching the Fay-led consortium to offer a joint-bid for the Farms? If not, why not?

Thank you, in advance, for any light you can shed on this issue.

Regards,

-Frank Macskasy

.

To which Chris Kelly replied,

.

from:    Chris Kelly kellyc@landcorp.co.nz
to:    [email]
date:    Thu, Oct 13, 2011 at 8:15 PM
subject:    Re: Landcorp & Shanghai Pengxin

Dear Frank,
We have not approached Fay.He represents a group of local farmers who want to break up the farms and run them as separate units.Landcorp wants to run them as a combined group.

Regards, Chris Kelly

.

Which is interesting. If  Shanghai Pengxin buys the farms, there would be no guarantees how they are operated. Landcorp will have no control over their management whatsoever.

As a partner, in a Fay-led consortium, Landcorp would have a measure of control.

Is this making sense to anyone?

.

.

.

Further Reading

Fay says xenophobia played no role in Crafar bid

Foreign Ownership of New Zealand’s Land

OIO Application Assessment & Timeframes

Farmland Grab

Shanghai Pengxin

Landcorp may bid for Crafar farms

Landcorp

Labour on farm sales – NOT good enough!

Kiwis against foreign ownership of farms

.

.

How to lose $5.3 billion dollars without any effort at all.

23 September 2011 27 comments

The latest in the on-going saga of our land alienation to overseas interests…

.

Full Story

.

The eight farms mentioned in the above story are located here,

.

.

Meanwhile, Monaco and Israeli investors have increased their shareholding in the Walter Peak Station Trust,

.

Source

.

By September of this year, the Aquila Group had increassed their holdings from eight to eleven South Island farms, with stated intentions to buy more,

.

Full Story

.

Since the start of 2006, the Overseas Investment Office (OIO) has approved the sale to foreign buyers of 300,400ha of freehold land and 239,600ha of other interests in land, such as leases.

Those figures are for land passing from New Zealand to overseas ownership, and does not include the  sale of land already in foreign hands.

Which brings us to this latest news,

.

Source

.

A record payout – $10.6 billion – going to New Zealand farmers.

Or… will it?

As more and more dairy farms are sold into foreign ownership, more and more of Fonterra payouts will also end up in the bank accounts of offshore investors. Not only will we be faced with higher prices for milk, cheese and other items containing dairy products – but the profits from the sale of those products will not come to New Zealand.

We will have lost income as well as dairy products.

Imagine if, eventually, half our dairy farms end up in foreign ownership; German, Chinese, American, etc. Then imagine half of Fonterra’s payouts ending up in offshore bank accounts.

Imagine – losing $5.6 billion.

We have already solds many former State assets to overseas investors. The profits from those assets now flow overseas, which will continue to impact negatively on our Balance of Payments account – pushing us further into deficit.

Quite simply put; we are importing more than we are exporting. That makes it more expensive to borrow capital from overseas markets (eg; for our home mortgages), and will eventually affects the interest we pay on those borrowings.

End result; triple whammy;

1. Higher dairy prices

2. Lost earnings

3. Higher interest rates

Now can anyone remind me – what, precisely, is the long-term benefit to New Zealanders to sell our productive land to overseas interests?

Something else to bear in mind when voting this year. The only ones who can stop the further alienation of our own land is us – the citizens of New Zealand. Because, my fellow Kiwis, no one else will do it for us.

.

***

.

Email sent to the Prime Minister of New Zealand, John Key,

.

————————————————————————–
from:    [email]
to:    john.key@parliament.govt.nz
date:    Sun, Sep 11, 2011 at 12:32 AM
subject:Purchase of farmland

Sir,

At a recent public meeting in the Hutt Valley, in answer to a question from
the audience, you responded that purchases of farmland, by overseas buyers,  
would be restricted to ten farms per purchaser.

Can you confirm that this restriction is in place, and when the regulation was
enacted?

Regards,

- Frank Macskasy
————————————————————————–

As of the publication of this piece, no response has been received from the Prime Ministers office.

.

***

.

+++ Updates +++

.

Full Story

.

Full Story

.

The Fay-led bid for the Crafar farms has failed because it is lower than the Chinese bid. This raises two issues,

  1. If a multi-millionaire such as Sir Michael cannot outbid overseas investors who are hell-bent on buying our farms – then what hope is there for ordinary kiwis, who do not have Sir Michael’s deep pockets, on competing against foreign investors? The answer is obvious; we cannot compdete. We would be outbid every time.
  2. If, as Sir Michael suggests, that over a certain price these farms are not economical, then why are the Chinese willing to pay more ($40 million?) than the farms are worth, from a viability-prospect? Could it be that the Chinese are not interested in profitability as much as securing food-production sources over the next few decades?

This is the clearest example yet as to why only New Zealanders should be permitted to own New Zealand farmland. As the world’s population passes the $7 billion mark, and is heading toward 9 billion by 2050, farmland will be the most important, strategic asset on this planet. Perhaps that is why the Chinese are willing to pay over-and-above what the Crafar farms are worth: they are buying into the future.

.

Further Information

Save The Farms

.

.

The Great NZ Sell-Off Continues…

7 September 2011 4 comments

Despite recent assurances from the Prime Minister, John Key, to restrict foreign purchases of NZ farmland, his assurances that,  “I think we’re making progress in this area” seems to be based on empty words and little more.

As the Dominion Post  reported last year, “an average of 82 hectares of agricultural land per day has been approved for sale to offshore investors”.

Some recent headlines bear out that report,

It seems quite clear that John Key’s optimistic view that ” I think we’re making progress in this area” is wildly misplace. As usual, his soothing, reassuring words bear little relationship to reality.

But voters have yet to figure that out, collectively.

What the New Zealand public does understand, with crystal clarity, is that selling our farmland to overseas investors is counter-productive; counter-intuitive; and short-sighted economically.

It also cheats our children of their birthright.

New Zealand farmland is over-priced and farmers have gotten into trouble with massive bankloans and reducing equity. In part, this is due to the weasy credit that has been available to NZ society since 1985, when our banking system was de-regulated by you-know-who.

De-regulation meant that vast amounts of money flowed into NZ, for banks to lend out as mortgages, investments, loans, etc.

It also meant that, as money-supply increased, so did property prices. Quite simply, we could expect to sell our properties because there was an endless supply of money available from banks. Purchasers could borrow 80%, 90%, and sometimes 100% for mortgages.

So property prices went up. Our borrowings went up. Demand went up, as speculation was tax-free (remember that there is no Capital Gains Tax in NZ). It was an uncontrolled spending spree, without any consideration that eventually, the bubble would burst.

Well, in 2008, the bubble burst. In early 2008, there were signs that there was a crisis looming in the US banking industry. On 3 March 2008, the Federal Deposit Insurance Corp, the US federal agency that backs bank deposits,  identified 76 banks as in trouble , a 52% increase from a year ago.

By July 2008, Freddie Mac and Fannie Mae, were in severe financial  trouble.

On 15 September 2008, Lehmann Bros, in Wall St, New York, filed for bankruptcy. The subsequent chain reaction of banking failures sparked a global financial crisis and the world fell headlong into a recession.

Here in NZ, credit dried up, and suddenly our farms were no longer worth the high prices that people had been paying for them. The property boom came grinding to a halt, and the “bubble” well and truly burst.

We  could no longer afford to buy over-priced properties to make speculative profits that had been financed using money borrowed from overseas. It was time to pay the Piper.

For many owners of farmland, the obvious solution seems to be to sell properties to overseas interests. Foreigners have the necessary capital – which local New Zealanders do not.

Unfortunately, in doing so, we are effectively locking-out our next generation from the opportunities that our generation – the massive-borrowing, heavily-indebted, Baby Boomers – had enjoyed. We have played “monopoly” with our farms; making ever-increasing profits; as we sold land to each other in a kingd of mad, money-go-round.

Now, we can only save our indebted ‘skins’ by selling out to foreign interests.

This is simply another chapter of the story I told here; “Greed is Good?“.

Is it fare, I ask myself, that we have priced farm land out of reach of our children?

Is it fare, I ask myself, that instead of our children enjoying the same opportunities that we did – that instead it will be Germans , Americans, Swiss, Chinese, etc, who will now reap the benefits?

The greed and naked self-interest of Bany Boomers is well known. It is no secret that we have looted the wealth of this country, and have left our children with fewer prospects than we enjoyed. No wonder so many of them have left New Zealand, and plan never to return,

“A Victorian-based Kiwi with a student loan debt, who did not want to be named because he did not want to be found by the Government, said he did not intend to pay back any of his student loan.

The 37-year-old’s loan was about $18,000 when he left New Zealand in 1997. He expected it was now in the order of $50,000. The man was not worried about being caught as the Government did not have his details and he did not want to return to New Zealand.

“I would never live there anyway, I feel just like my whole generation were basically sold down the river by the government. I don’t feel connected at all, I don’t even care if the All Blacks win.

“I just realised it was futile living [in New Zealand] trying to pay student loans and not having any life, so I left. My missus had a student loan and she had quite a good degree and she had paid 99c off the principal of her loan after working three years.” – Source

As we lose more and more farmland to overseas ownership, we should also expect some fairly noticeable consequences to follow;

1. Profits will flow back overseas, to offshore investors’ banks. This will impact on our Balance of Payments (negatively, I might add). This, in turn, will affect our sovereign credit rating; the interest rates we pay for money we borrow… and finally, our mortgages.

2. As farm produce fetches higher prices overseas, expect to see this reflected in the price of dairy products and meat that we purchase in our supermarkets. We have already experienced the high cos of milk and cheese, due to high prices overseas. Expect this to worsen.

Property and farm owners may object. They will squeal like stuck pigs, in fact. But the sale of our land to foreigners, whether American or Chinese; Australian or German; will eventually impact impact negatively on our economy and on the prospects of our children.

Enough is enough.  No more pandering to the self-interest of Baby Boomers.

It is time that common sense kicked in. The sell-off of our country has to stop. Otherwise, as John Key warned, we will become tenants in our own land.

To hell with that.

 

 

Follow

Get every new post delivered to your Inbox.

Join 698 other followers