Foreign investment in Aotearoa/New Zealand

Overseas Investment Office – October 2017 Decisions

Indonesian Hoteliers Keep It In The Family

Kusnadi Budiman and other family members (Indonesia 100%) have consent to acquire 100% of the shares of Perfect Match Investment Ltd, from Kusnadi Budiman (Indonesia 100%) for $142,000,000. The OIO states that Perfect Match Investment Ltd is a Hong Kong incorporated company that owns several hotels in New Zealand. Kusnadi Budiman has been Perfect Match’s sole shareholder.

As part of his succession plan, this transaction will dilute Kusnadi Budiman’s shareholding in Perfect Match to his family members and will raise capital for the family business. Budiman and the individuals with control of the investment have satisfied the OIO that they have the relevant business experience and acumen, have demonstrated financial commitment to the investment and are of good character.

The Budiman family were linked to the Indonesian kleptocratic Salim Group, whose branch banks were torched in the 1998 riots that overthrew President Suharto (see Murray Horton’s “Seize The Suhartos’ NZ Assets”, in Watchdog 92, December 1999, http://www.converge.org.nz/watchdog/92/1seize.htm). See the February 1990 OIC consents for Perfect Match’s (Hong Kong) first appearance in New Zealand, buying 5% of Winstone Pulp (the newly privatised Karioi Pulp Mill and Waimarino Forest). Under the name Cogent Corporation and through its subsidiaries > Colwall and Columna Capital, Perfect Match Investments moved into New Zealand hotels.

In 2011 it splashed out $93 million on the InterContinental in Wellington and Ibis and Novotel in Rotorua hotels, taking its stake in NZ to more than $200 million (NZ Herald, 20/9/11, http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10752895). In 2016 Colwall Property Investment was the third largest NZ hotel owner by rooms, after acquiring Novotel Lakeside and Aspen Hotel in Queenstown, giving it eight New Zealand hotels, or 6% of the total (JLL 12/10/16, www.jll.nz/new-zealand/en-gb/news/775/jll-releases-report-on-top-10-new-zealand-hotel-operators-and-owners).

Hong Leong Group/CDL Housing Subdivision In Hamilton

CDL Land NZ Ltd ALtd (NZ Public 38.9%; Hong Leong Group, Singapore 24.45%; Singapore Public 22.3%; various overseas 11.1%; UK Public 3.3%) has consent to acquire approx. 43 hectares at 258, 265 & 272 Gordonton Road, Huntington, Hamilton from Neil Roderick McLean, Gavin William Sheath, John William Alexander Scott, Mary Elizabeth Scott and Eltan (Scott) Trustees Ltd as trustees of the Scott JDJ No.2 Trust and LM Scott Family Trust (NZ 100%). Price was $14.6 million.

The OIO states that CDL Land NZ’s business is the acquisition and development of land from an undeveloped form to residential housing sections. It plans to develop the land into a modern high quality residential subdivision and sell the sections on the open market. The subdivision is intended to include supporting open space, commercial and social activities. CDL NZ has a number of previous investments in New Zealand, which have created jobs and residential housing sections, in Auckland, Christchurch and Hamilton. New Zealanders own approx. 39% of CDL Land’s parent company, which is NZX listed.

CDL has been buying up properties in Aotearoa for subdivision for many years, coming before the OIC and OIO almost every year since the 1990s. In 2008 two controversial CDL developments were located in the planned Christchurch green belt (Chris Hutching, NBR, 8/8/08, https://www.nbr.co.nz/article/eco-village-challenges-urban-limit-33834) and in 2016 it submitted its views to Government on urban development policy (http://www.mfe.govt.nz/sites/default/files/media/NPS_UD%20-%20CDL%20Land%20NZ%20Limited%2014827%20(Document%201%20of%202).pdf).

CDL Group (or City Developments Ltd) is also the second biggest hotel owner in NZ, after the CP Group (owned by the NZ-based Pandey family). CDL’s 12 hotels have 6% of the market. They are also refurbishing the Millennium Hotel (formerly Copthorne) and managing the Grand Millennium (formerly Rendezvous) in Auckland. NZ’s top ten hotel owners hold 38% of all hotel rooms (Stuff, 18/10/16, www.stuff.co.nz/business/property/85164931/hotels–who-are-the-biggest-players). See also December 2017 re CDL Land and City Development Ltd

Apple Buys Up NZ Wireless Power Tech

Apple Inc. (US Public 76.1%; The Vanguard Group, Inc. US 6.33%; BlackRock Inc. USA 6.1%; Japanese Public 3.9%; various overseas 3.7%; UK Public 2%; Canada Public 1.9%) has consent to acquire 100% of the shares of Powerbyproxi Ltd from existing shareholders of Powerbyproxi Ltd (NZ Public 74.1%; TE Connectivity HK Ltd, Hong Kong [SAR] 12.4%; Samsung Electronics Co. Ltd, South Korea 10.79%; Eric Frank Tracey, UK 1.18%; Mark Thomas Jaffray, UK 0.7%; Australian Public 0.6%; Wakatipu Enterprises Ltd, Virgin Islands 0.25%). Price withheld under s.9(2(b)(ii) but in excess of $100,000,000.

The OIO states that Apple is the world’s largest information technology company by revenue. Apple and its brands have a long-standing business presence in NZ. It plans to buy all of the shares in Powerbyproxi Ltd, a New Zealand registered company that designs and develops wireless power technology. Apple has satisfied the OIO that the individuals who will control the investment have the relevant business experience and acumen and are of good character, and Apple has demonstrated financial commitment to the investment.

Well, you all know about Apple and its 0.4% tax rate (see Murray Horton’s “Dodge City: The Transnationals’ Favourite Place To Do Business”, in Watchdog 138, April 2015, www.converge.org.nz/watchdog/38/01.html). An Apple-owned Powerbyproxi is unlikely to pay much tax in NZ either. PowerbyProxi does consumer electronics and industrial applications and has more than 350 patents or patent applications.

Its wireless power technology uses magnetic induction in a rechargeable battery system that includes the world’s smallest wireless power receivers, integrated directly into devices using the existing slot for AA batteries. NZ tech investor Movac bought into the company, as did Samsung in 2013. In September 2017 Apple announced plans for its own wireless charging technology; it was expected to release AirPower, a wireless charging mat for its products, in 2018 (NZ Herald, 25/10/17 www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11936555). Will that be the last we hear of Powerbyproxi? Its Website has gone already.

Tegel Leases More New Plymouth Land

Tegel Foods Ltd Ltd (NZ Public 25.8%; US Public 23.3%; various overseas 16.4%; Australia Public 19.5%; Singapore Public 3.8%; Dutch Public 2.7%; Cayman Islands Public 2.5%; UK Public 2.4%; Germany Public 2%; Canada Public 1.6%); has consent to acquire a leasehold interest in 7.6876 hectares at 229 Kaipi Road, New Plymouth from Kaipi Holdings Ltd (NZ 100%). Price was $15 million.

The OIO states that Tegel is a poultry producer involved in the breeding, hatching, growing, and processing of chicken and turkey for the New Zealand market and export markets. Tegel has entered into an agreement with the lessor for the construction and lease of poultry sheds and ancillary buildings. Tegel identified this as a desirable location to build and operate a new broiler chicken farming facility, raising broiler chickens that have been hatched at Tegel’s hatchery from eggs fertilised at Tegel’s breeder facilities.)

The benfits to New Zealand include:

creating six new direct and indirect jobs associated with the above land;
increasing export receipts;
greater productivity in terms of increased chicken production; and
increasing the processing of primary products (chicken) per annum.

Tegel began in 1961 and is now NZ’s biggest chicken meat producer. It employs 2,300 people, most of them in Taranaki where Tegel has processing plants and is steadily buying or leasing more land. For Tegel’s ownership history, see OIO Decisions of February 2011, April 2010, December 2008 and October 1996; for land purchases and leases, see November 2017, November 2016, July 2016, August 2014, May 2013, September 2008, February 2008, March 2006, November 2000, September 2000.October 1999, April 1997 and June 1994 – and there’s another consent for leasehold land next month.

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