Shanghai Pengxin has nous to run farms – court

August 8, 2012

The Court of Appeal is satisfied that Shanghai Pengxin has the nous to run what were the Crafar farms.

The Court of Appeal has turned down a bid by merchant banker Michael Fay and two Maori trusts to stop the sale of 16 Central North Island farms, saying it was satisfied with the general business acumen and experience of the Chinese buyer.

Judges Mark O’Regan, Terence Arnold and Douglas White dismissed the judicial review, saying Jiang Zhaobai’s ability to bring himself from humble beginnings to become “a person of some stature in the Chinese commercial world,” would satisfy the minister making the decision in approving the sale of the Crafar family farms.

“The information provided to the ministers was sufficient to enable them to determine that he and the other controlling individuals had generic business skills and acumen relevant to the Crafar farms investment,” Judge Arnold said in delivering the judgment.

“We see nothing in the language, taken in context, to indicate that Parliament had in mind that an investor must have any particular combination of the requisite skills and experience,” the judgment said.

Agri-business experience was only one factor which needed to be taken into consideration.

 “While apparently important, it did not lead to a conclusion that was insupportable or unreasonable in the absence of that experience.”

The judges said even if the ministers erred in accepting Pengxin’s agribusiness investments, “it is unlikely that we would have exercised our discretion to grant a remedy.”

That’s because the ministers decided the foreign investment would have a substantial benefit to New Zealand, the deal hasn’t been settled and creditors are still waiting on repayments, and that the farms are being operated by the receiver in a manner than presumably “involves minimal further investment.”

Those who oppose the purchase forget about the creditors who are owed millions of dollars. The higher the purchase price, the more the creditors will recover.

I don’t think the state should be farming but Landcorp farms are generally well managed. Their experience and Shanghai Pengxin’s money should be good for the farms and the stringent conditions imposed by the Overseas Investment Office will result in benefits for the country too.


Whose money is it?

April 22, 2012

Opponents to the sale of the Crafar farms to Shanghai Pengxin, and other foreign investment, talk about the owners taking money out of New Zealand.

But whose money is it?

Anti-Dismal clearly explains it’s ours and it’s useless anywhere else:

. . . Let us assume for a moment that these evil foreigners make a NZ$1 profit which, in an effort to piss-off Michael Fay, they wish to take it back to China. How do they do it? Clearly a New Zealand dollar isn’t worth anything in China so the Chinese holder of NZ currency will have to sell their NZ$1 to buy Yuan. But why would anyone want to buy said NZ$1? The only use for a NZ$s is to buy something made in NZ. Thus the buyer of the NZ$s must want it to buy a NZ export of some kind. What is Michael Fay’s problem with this? The NZ$1 doesn’t go overseas in any meaningful way, it gets spent on New Zealand produced goods and services no matter who gets the profits from the ownership of the farms. If a New Zealander gets the profits they spend them on New Zealand made goods and services, if a foreigners gets the profits they sell the NZ$s to someone who wants to buy New Zealand made goods and services.

In short New Zealand will not lose “around $15 million in earnings every year” if the Crafar farms are sold to the Chinese. For New Zealand’s wealth and prosperity, it does not matter where the profits  from New Zealand businesses end up. All that matters for the New Zealand  economy is that New Zealand remains a place where business transactions  take place – irrespective of who owns the business. New Zealand’s (real) wealth is the amount of goods and services produced each year, no matter who owns the business that do the producing. What we want is for firms to be owned by whoever will use those resources most efficiency, no matter what their nationality. Any investment that moves resources towards a more efficient use is a good investment for New Zealand, again no matter what the nationality of the investor . . .

The farms in question are already owned by foreigners – the banks which put the business into receivership.

If they were bought by New Zealanders, they’d be funded, at least in part by foreign debt, adding to our already heavily indebted state and paying interest to foreign-owned banks.

Why is paying interest to  foreign lenders not regarded as a problem if letting a foreign owner take some of the profit from their investment is so bad?


Tagged twice

November 28, 2008

I’ve been double tagged – first by MandM then by Keeping Stock so I have to:

              *  Link to the person who tagged you

             *   Post the rules

             *   Share seven random or weird facts about yourself

             * Tag 7 random people at the end of the post with their links

So here’s the seven random/weird facts:

1. I had a one-way ticket to Britain when my farmer and I met so he flew 12000 miles to propose to me.

2. My longest friendship is older than my memory – which isn’t a sad reflection on the state of my memory, we met when her family moved next door to mine when we were both two.

3. I lived on Great Mercury Island for a year – employed by Michael Fay & David Richwhite, who own the island, to supervise the correspondence school lessons of the farm manager’s three children.

4. I’ve received a card on every Valentine’s Day of my life – not necessarily because it’s Valentine’s Day but because it’s also my birthday.

5. I lived for three months in Vejer de la Frontera.

6. Most people call me Ele which is a contraction of my name – Elspeth, the Scottish form of Elizabeth.

7. We hosted an AFS student from Argentina and his family is now our family.

And an eighth: I never pass on anything resembling a chain letter and as this could be construed as such I’m tagging the following people as a tribute to their blogs but won’t be at all offended if they don’t want to play the game:

rivettingKateTaylor

Bull Pen

Art and My Life 

John Ansell

Rob Hosking

Something Should Go Here

PM of NZ


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