An overseas company’s application to purchase Lochinver Station has been declined because the benefits to New Zealand are not substantial and identifiable, Ministers Paula Bennett and Louise Upston say.
Pure 100 Farm Ltd, a subsidiary of China-based Shanghai Pengxin, applied to the Overseas Investment Office (OIO) last year to buy the 13,800 ha farm near Taupo for $88 million.
“Because Lochinver Station is classified by law as sensitive land, Ministers must consider whether the application meets the requirements set out in the Overseas Investment Act,” Associate Finance Minister Paula Bennett says.
“While we recognise and support the importance of overseas investment, the Overseas Investment Act states it is a privilege for overseas people to own sensitive New Zealand assets and therefore requires such investments to meet statutory criteria for consent.
“After detailed and careful individual consideration, we are not satisfied there will be, or is likely to be, a substantial benefit to New Zealand – a key requirement for applications of sensitive land of this size.”
While the OIO said the question of whether the benefits of the potential investment to New Zealand are or could be substantial and identifiable was finely balanced, it recommended approving the application.
“We agreed parts of the proposed investment could benefit New Zealand but in our judgement on the overall balance of evidence, the benefits are not likely to be substantial and identifiable,” Land Information Minister Louise Upston says.
“This proposed sale didn’t pass a test we are required to exercise Ministerial judgement on.
“This is an example of our system working well. The OIO conducted a thorough investigation before making a finely balanced recommendation. Ministers carefully assessed the evidence and ultimately came to different view.”
A summary of the reasons for the Ministers’ decision can be found here.
This decision shows the bar for overseas ownership of farm land is set very high.
It is very difficult for a would-be foreign buyer to prove that it would provide more benefits than a local one, even if the local is hypothetical.