January 2005 decisionsCarter Holt Harvey buys Tenon’s structural and wood processing business Newmont buys home and church in Waihi for buffer around new Favona mine Kim Crawford of Canada buys Marlborough land from New Zealand Wineries Insufficient evidence on “good character” in Kaeo “spiritual retreat” approval More land for Swiss family in Paihia, Bay of Islands
Carter Holt Harvey buys Tenon’s structural and wood processing businessCarter Holt Harvey Limited (CHH) has approval to acquire “the structural and wood processing business of Tenon Limited and/or its wholly owned subsidiaries. The assets of the business include Tenon’s processing businesses located at Kawerau, Rotorua, Mt Maunganui, and elsewhere.” The price is $165,000,000, and the purchase includes · 85 hectares at Fletcher Avenue, Kawerau; and 216 State Highway 38, RD 3 Rotorua; and · 7.8 hectares of leasehold at 124 Hewletts Road, Mt Maunganui, Bay of Plenty. The land “includes/adjoins land that exceeds 0.4 hectares which is provided as a reserve, a public park, for recreation purposes, or a private open space”.
CHH is owned as follows:
· 50.5% – International Paper Company Limited (U.S.A.) · 5% – Franklin Resources Inc (U.S.A.) · 18.1% – Persons who may be “overseas persons” · 5.7% – Australia · 20.7% – Aotearoa
Tenon (the former Fletcher Challenge Forests) is owned · 28.0413% – minor shareholdings, (U.S.A. ) · 4.4391% – Xylem Fund ILP (U.S.A.) · 12.7759% – U.K. · 2.0194% – Australia · 1.3347% – Other overseas shareholders · 0.2299% – Singapore · 0.1% – France. · 51.0598% – Aotearoa
In May 2004, Rubicon Forests Limited received OIC approval to take a 50.1% shareholding in Tenon, and was itself 60.4% overseas owned. See our commentary for that month for further details.
Tenon has been struggling, making a loss in the calendar year 2003. It has come under pressure from Rubicon (itself significantly controlled by Ron Brierley’s Guinness Peat Group) to rationalise its operations. [Decision number 200510001.] Newmont buys home and church in Waihi for buffer around new Favona mineNewmont Waihi Gold Limited, owned by Newmont Mining Corporation of the U.S.A., has approval to acquire two properties “in the immediate vicinity of other land” owned by it “in association with [its] Martha Mine operations”:
· “a residential property” on 0.98 hectares at 11 Boyd Street, Waihi, Coromandel for a suppressed amount from John Askew and Judith Ann Askew of Aotearoa [Decision number 200510002]; and · “a church building, carparking and other improvements” on 0.5536 hectares at 21 Boyd Street, Waihi, Coromandel for a suppressed amount from Assembly of God Waihi Property Trust Board of Aotearoa. [Decision number 200510007.]
In both cases, the OIC states:
The Applicant proposes to acquire the subject property in connection with the proposed Favona Underground Project as the property is affected by current and future planned exploration in the vicinity of Favona. The acquisition of the subject property is likely to establish a buffer zone surrounding the Favona project.
The Favona project involves a significant new investment for the purposes of an underground gold mining operation. There will likely be few surface effects apart from the air vent shaft, the access portal and the infrastructure required to service the underground workings and transport the ore to the existing processing plants. The land is subject to the Favona Exploration Permit 40-645 and the Favona Mining Permit 41-808 held by the Newmont Group.
The establishment of a buffer zone is likely to result in greater efficiencies to the Applicant’s mining operation as a result of minimising the possible operational conflicts with adjoining land owners which could result in a curb on the operational capabilities of the mine.
In the first case, the land is “immediately adjacent to the Favona Exploration Permit 40-426 from which companies in the Newmont group have been granted the Favona Mining Permit 41-808 for the Favona Underground Mine”.
The last purchase for the Favona project reported by the OIC was in June 2004 (see our commentary for that month for further details). Kim Crawford of Canada buys Marlborough land from New Zealand WineriesKim Crawford Wines Limited of Canada has approval to acquire 1.8 hectares at Vernon Street, Riverlands, Marlborough for $17,790,016 from New Zealand Wineries Limited of Aotearoa. The land “includes/adjoins land that exceeds 0.4 hectares which is provided as a reserve, a public park, for recreation purposes, or a private open space”.
According to the OIC,
Kim Crawford Wines is a wine producer and primarily sells its wine under the “Kim Crawford” label. It buys grapes from contract growers in the North and South Islands. Kim Crawford Wines has leasehold interests in vineyards totalling 20.0791 hectares located in Nelson, Marlborough and Hawkes Bay, and operates a tasting room and cellar door facilities at the Te Awanga Vineyard in Hawkes Bay. Other New Zealand wine companies’ contract facilities are utilised to make, bottle and warehouse wine.
In 2000, the vendor built a winery on the subject property with a 1,000 tonne capacity. The vendor is a specialist design, build, and lease back company who has experience in the provision of specialist wine and wine processing facilities. The winery was purpose built for Marlborough Valley Cellars Limited (whose shareholders comprised persons associated with Crawford Productions Limited the previous shareholder of the Applicant), St Clair Estates Wines Limited (a current lessee of the winery facilities), and Cairnbrae Wines Limited. In 2004, Marlborough Valley Cellars Limited relinquished the lease in favour of new lessees, which were granted to the Applicant and St Clair Estates Wines Limited. The winery currently has a 6,500 tonne capacity. The Applicant advises that post-acquisition the vendor will be commissioned to expand the capacity of the winery to 9,000 tonnes.
The vendor has also been commissioned to complete a new winery for St Clair Estates Wines Limited who will take over the new facility following the acquisition of this facility by the Applicant. [Decision number 200510006.] Insufficient evidence on “good character” in Kaeo “spiritual retreat” approval
Second, uniquely, the OIC declines to state that the owner of the applicant company is of good character. The OIC states:
The Commission is of the view that there is insufficient evidence to conclude whether the individual exercising control over the overseas person is, of good character and not an individual of the kind referred to in section 7(1) of the Immigration Act 1987.
Further, the OIC does not state the usual mantra, that “The Commission is satisfied that the Applicant has business experience and acumen relevant to and is demonstrating financial commitment towards the investment.”
The Overseas Investment Act 1973, under which decisions are made, states (section 14B(2)) that the Ministers (the Treasurer and the Minister of Lands)
must grant the approval, consent, or permission if satisfied that—
(a) The overseas person has, or, if the overseas person is not an individual, the individuals exercising control over the overseas person have, business experience and acumen relevant to that overseas investment; and (b) The overseas person has demonstrated financial commitment to the overseas investment; and (c) Every person who will have not less than a 25% beneficial interest in the overseas investment is, or, if the overseas person is not an individual, each individual exercising control over the overseas person is, of good character and not an individual of the kind referred to in section 7(1) of the Immigration Act 1987;…
(3) To avoid any doubt, the Minister and the Minister of Lands must not grant approval, consent, or permission unless they are satisfied as to the matters in subsection (2). (our emphasis).
The OIC (to whom the Ministers delegate authority) does not appear to be “satisfied” of all these matters. It is therefore not clear why it approved the sale.
The details of the approval are as follows.
The Valley Healing Centre Limited, owned by Emma Frances Mary Gilbert of the U.K., has approval to acquire 12.2 hectares at Hikurua Road, Kaeo, near Whangaroa, Northland for $420,000 from Bollen Property Company Limited owned by Petrus Johannes Bollen and Neeltje Jeanette Bollen-Prior of Aotearoa.
According to the OIC,
The subject property is intended to be operated as a community focused spiritual retreat centre and camping ground. The Applicant proposes to develop the property through an upgrade of the existing buildings and by landscaping the grounds to provide a welcoming and healing space for groups and individuals to deliver (and attend) workshops centred on spiritual healing, art and craft, physical wellbeing and as an outlet for family camping and retreat. The Applicant intends to rent out the property to various alternative lifestyle practitioners who can run short courses on the property. The Applicant also intends to run Buddhist meditation retreats and offer Reiki treatments. The centre will be open from November to April and will be closed during the winter months. In this regard the Applicant advises that the property would not be appropriate to accommodate a full-time community. At present the Applicant advises that the lodge and gatehouse on the property are being let to cover mortgage repayments.
The sole shareholder of the Applicant is demonstrating a commitment to New Zealand through intending to apply for and take up New Zealand permanent residency.
The land “includes/adjoins land that exceeds 0.4 hectares which is provided as a reserve, a public park, for recreation purposes, or a private open space”. [Decision number 200510005.] More land for Swiss family in Paihia, Bay of IslandsPaihia Convenience No. 1 Limited, has approval to acquire 106 hectares at Hewitt Road, near Paihia, Bay of Islands, Northland for $2,250,000 from Peter Garth Paganini and Kathleen Mary Paganini of Aotearoa. The land “includes/adjoins land that exceeds 0.4 hectares which is provided as a reserve, a public park, for recreation purposes, or a private open space”. Pahia Convenience is owned by members of the Dvorak family of Switzerland: Jiri Dvorak and Babette Dvorak (46% each), and Guy, Dui, Dan and Lara Dvorak (2% each). According to the OIC,
The Applicant’s shareholders obtained consent in 1995 to acquire the shares in the Applicant. The Applicant farms a 63.691 hectare property located at Taronui Bay, Kerikeri. The Applicant proposes to acquire the adjoining 105.992 hectare property and amalgamate the farming operations. The proposed acquisition will enable the Applicant to increase the productivity by achieving economies of scale. The Applicant advises that neither property individually is an economic unit.
The proposal is likely to ensure that the subject property will continue to be used for productive agricultural purposes rather than being subdivided for lifestyle purposes. This when combined with the productivity and efficiency gains that are likely to accrue to the Applicant’s farming operation the acquisition is in the national interest.
In our commentary on the OIC’s June 1995 decisions we reported:
Two Swiss residents who are seeking permanent residency here are acquiring the 76% of Paihia Convenience No 1 Ltd that they don’t already own for $500,000. The company owns 64 hectares of land at Kerikeri, Northland. They are acquiring it for “lifestyle purposes” and as their residence in Aotearoa. “Dr J. Dvorak … is a world leader in musculoskeletal medicine … [his] medical expertise and knowledge will be invaluable to medical research and teaching in New Zealand”. [Decision number 200510004.] Summary statisticsAll investments The value of investment approved in January 2005 is considerably higher than for the previous January, both for net value (i.e. disregarding sales from one overseas investor to another, and discounting part New Zealand ownership of the assets) and gross value. The greatest part of the value of the approvals is for sale from one overseas investor to another.
*In addition there was one retrospective approval granted during the month. This involved a gross consideration of $420,000 and a net investment of $420,000.
Investment involving land Sales of land approved by the OIC during January fell substantially in area compared to January 2004, both gross and net. There have been no refusals this year, nor were there in January 2004.
* In addition there was one retrospective approval granted during the month. This involved a gross land area of 12 hectares and a net land area of 12 hectares, a gross consideration of $420,000 and a net investment of $420,000.
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Compiled by: Campaign Against Foreign Control of Aotearoa, P. O. Box 2258 Christchurch. |
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