SFO looks into Natural Dairy after OIO tip-off

Thursday 21st October 2010 2 Comments

The Serious Fraud Office is looking into several transactions involving Hong Kong-listed Natural Dairy and Auckland businesswoman May Wang’s UBNZ group of companies.

The SFO is looking at the purchase of the Crafar family farms, which are being assessed by the Overseas Investment Office and helped spark a national debate on the need to control productive land.

The investigator said it’s acting on information it received from the OIO, raising questions about whether the deal will get the foreign investment office’s seal of approval.

“An investigation into transactions involving Natural Dairy and the UBNZ group may disclose serious or complex fraud,” director Adam Feeley said in a statement.

The office is conscious of the impact of its actions will carry out the investigation as quickly as possible, he said.

The investigation comes the same day Natural Dairy’s company secretary, Chan Yim Kum, resigned for health reasons.

She follows former chairman Yip Kean Mun and director Ng Chun Ming, who both stepped down from the board last month, paving the way for Auckland businessman Jack Chen’s nephew, Wu Neng Kun, to head the investment company’s board.

Natural Dairy has scaled back its plans to spend up to $1.5 billion buying up land, livestock and processing facilities, and will instead focus on the Crafar farms.

Last month, the OIO pooh-poohed reports it had shot down Natural Dairy’s bid to buy the farms.

The company's Chinese subsidiary, Jiangxi Natural Dairy, previously entered into a 12-month agreement with Wang's UBNZ Funds Management Ltd. to supply and process about 37.5 million litres of UHT milk for some $105 million.

UBNZ Funds will have to source about 39 million litres of raw milk from Fonterra and has told Natural Dairy it has leased a vacant factory and sourced three UHT milk production lines. Natural Dairy is about a month overdue in filing its annual report with the Hong Kong Stock Exchange.

Businesswire.co.nz

Comments from our readers

On 22 October 2010 at 10:04 am mitchell said:

It is unfortunate some other body could not be appointed to this type of task, given that the SFO has more on it's plate than it can reasonable handle. There are thousands of domestic investors having to take their own actions against shonky directors, trustees and receivers because the SFO claim their cases either too small or too difficult. Or is it that the SFO cannot get any political capital from them?

On 22 October 2010 at 10:40 am Pamela said:

I agree that the SFO should be directing its resources toward resolving cases around the financial fiasco that has occurred nationally over the last 3 to 4 years. More than 2 billion has been lost and investors feel that their complaints are ignored while larger or more publicised cases get attention.Many of these investors have been completely shafted by directors and other professionals who continue to operate without any scrutiny or censure.