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Chinese company expected to file OIO application for Crafar farms

Wednesday 13th April 2011

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Chinese company Shanghai Pengxin is expected to file its application to buy the Crafar family farms with the Overseas Investment Office (OIO) this week.

Receivers for the Crafar family's four companies said in late January that they had accepted an offer from Shanghai Pengxin International Group, the company of Shanghai real estate mogul Jiang Zhaobai.

At the time receiver Brendon Gibson of KordaMentha said, "it's the best offer we have", and there was no longer a deal with a previous group of Chinese investors, Natural Dairy NZ Holdings, to buy the farms.

Two cabinet ministers, Maurice Williamson and Kate Wilkinson last year declined consent for Natural Dairy's application because they were not satisfied that all the individuals with control of Natural Dairy were of good character.

Today The New Zealand Herald reported it understood Shanghai Pengxin would file its application for the Crafar properties with the OIO this week.

It would face tougher rules than Natural Dairy after changes came into effect in January intended to make it tougher for foreigners to control the entire rural supply chain.

Jiang Zhaobai and his brother Jiang Lei, who founded Shanghai Pengxin, are understood to have been born into poverty, but have made enough money through property development in Shanghai to put them in the top 50 of China's wealthiest billionaires.

Their private company does not have a long history in the dairy industry, but has a sheep-breeding operation in China.

It also invested in soybean and corn growing in Bolivia, and has agricultural interests in Argentina and Cambodia.

The OIO, as well as rejecting Natural Dairy's bid to buy 16 Crafar farms had also refused to give it retrospective approval for another four farms it had already bought from the Crafar family.

But Natural Dairy has not yet surrendered the four farms, and has told its shareholders it is determined to set up a substantial dairy operation in New Zealand.



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