Thursday 21st March 2019
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PGG Wrightson’s largest shareholder Alan Lai and his company Agria have been fined $220,000 and ordered to pay another $30,000 in costs by the High Court for breaching good character conditions imposed by the Overseas Investment Office.
The breaches arose from Lai and Agria’s settlement last year with the United States Securities and Exchange Commission over violations of US securities law.
In imposing the fine, Justice Christine Gordon said the nature and extent of the breaches were serious.
“There is a strong need to deter breaches of the good character requirement, having regard to its importance in the context" of the Overseas Investment Act, Justice Gordon said.
The penalty was needed to ensure that large corporations take their obligations under the Act seriously, she said.
OIO general manager Vanessa Horne welcomed the decision.
“The judgment reinforces that overseas investment in New Zealand is a privilege and there are ongoing responsibilities when investing here.”
Agria has been ordered to pay $100,000 in penalties while Lai has been ordered to pay $120,000 in penalties and another $30,000 towards the OIO’s costs.
Horne says the size of the penalties reflects the serious nature and extent of the securities violations alleged in the US, which involved fraudulent accounting and share price manipulation.
As part of its settlement with the OIO, Agria agreed to divest its interest in Wrightson to below 50 percent, which it did in December last year. Agria, which is a Cayman Island registered company, now owns 46.6 percent of Wrightson.
Lai, who used to chair Wrightson and is also known as Lai Guanglin, is a citizen of Singapore who lives in Hong Kong.
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