And Shanghai Pengxin said it was “surprised and extremely disappointed with the decision”.
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“We are unclear as to why this property is different to the many others that have been approved through the OIO process, given the obvious benefits both to the farm and to Stevenson Group”, it said.
It said the question of whether the benefits of the potential investment to New Zealand were or could be substantial and identifiable was finely balanced in this case, and recommended approving the application.
Prime Minister John Key says the decision to reject a bid by the Chinese-owned Pure 100 to buy Lochinver Station does not send mixed messages about New Zealand’s approach to foreign investment.
The two National Party ministers may have had the possibility of a public backlash in mind when erring on the side of caution in response to what the OIO described as the “finely balanced” application for the Lochinver purchase.
Stevenson Group CEO Mark Franklin said he was disappointed with the decision and disagreed with the assumptions used and the way the criteria was applied. The decision on whether the government had approved the deal was embargoed until then, although the New Zealand Herald has reported the deal has been rejected because Pengxin could not show it would add more value to the assets than a hypothetical local buyer.
“Beyond this transaction, this decision will have significant economic ramifications for the New Zealand economy, particularly in the areas of international relations, uncertainty of foreign investment and rural land prices”, he said. A lot of sensitive land has gone into the hands of foreign buyers in that time.
“Labour would strengthen overseas investment criteria by creating a publicly-searchable farm sales register, require buyers to have a clear plan to create new jobs and improve productivity and keep them to their word through spot audits”, he said.
The Stevenson family has owned Lochinver for 60 years but started as a drain-laying business in 1912, expanding into quarrying and construction in the late 1930s, and making concrete blocks from 1946.
“This was not proven here and we believe the Lochinver decision reinforces the importance of changes made to the Overseas Investment Office rules over recent years”, says Dr William Rolleston, President of Federated Farmers.
There have been growing concerns about foreign land ownership in New Zealand. “It’s unfortunate that other sales without similar attention are being waived through”, Grant Robertson says.
Finance Minister Bill English denies it was a political decision.
“Their polling is telling them selling land to foreigners is very unpopular, so they’ve sacrificed this one”.
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However, the question is not so much whether National has suddenly become averse to foreign investment, but rather are the rules for foreign land sales tight enough, and are they being enforced as rigourously as many New Zealanders would expect them to be?
