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Fay poll shows public wants Govt to stop Crafar sale to Chinese buyer

Wednesday 23rd November 2011 4 Comments

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Polling for the Michael Fay-led consortium trying to buy the Crafar dairy farms shows an “overwhelming desire for the government to step in and stop the sale” to the would-be Chinese buyer, Pengxin International.

However, the same poll shows two-thirds support for joint venture investments involving a combination of Chinese and New Zealand interests.

The poll, conducted by UMR Research, comes as Labour’s Associate Finance spokesman David Parker accuses the Overseas Investment Office of buckling to political pressure not to announce a decision on the Crafar farm sale before the Nov. 26 election.

Parker alleges “political motivations behind no decision having been taken in the past six months on the latest foreign application to buy the Crafar farms.”

“On the face of it, there’s no reason the Overseas Investment Office could not have made a decision. So why hasn’t it?” he said.

The Pengxin application follows the rejection of a bid by another Chinese bidder, Natural Dairy.

A well-established and reputable investor in both China and globally, Pengxin is seen by the investment community and by the Chinese government as a fundamental test of the New Zealand-China trade relationship.

Senior investment banking figures have warned that failure to approve the Pengxin bid could see a withdrawal of Chinese interest in New Zealand investments, and a cooling in Beijing to New Zealand’s aspirations in China, particularly Fonterra’s plans for dairy industry development.

The OIO and Prime Minister John Key have both described the Pengxin bid as “complex”, but have given no further detail as to why the application has run so far beyond the OIO’s target timeframe for approvals.

“The only conclusion I can come to is that National doesn’t want a decision to be made until after the election, because the government is already copping so much flak for its intention to sell our power companies,” said Parker.

The UMR poll also finds the public would “prefer the farms are sold to a New Zealand syndicate even if at a lower price”. The Fay consortium, which includes some iwi and private investors, is offering $170 million for the Crafar farms, in receivership, against Pengxin’s offer in excess of $200 million.

The receivers, KordaMentha, have accepted the Pengxin bid, conditional on OIO approval and have said they will not entertain alternatives in the interim.

The UMR poll tested the views of a relatively small sample of 500 people has a margin of error “at 95 percent confidence level” of 4.4 percent, but its results are emphatic.

Some 82 percent saw foreign ownership of agricultural land as “a bad thing”, while just 10 percent thought it was “a good thing”, with almost identical numbers opposing farmland sales to foreign investors.

Most emphatically opposed is Chinese investment, with 81 percent opposing such sales, dipping to around three-quarters of those polled opposing sales to Singaporean, Japanese, German and American investors, while 67 percent opposed sales to British investors, and 54 percent opposed sales to Australians.

Australia gained by far the largest positive support as a buyer of New Zealand farmland, at 33 percent, followed by Britain at 23 percent.

Opposition to selling the Crafar farms was constant across age groups, but stronger among women (88 percent opposition) than men (79 percent), and one in five National Party voters oppose the sale.

Told that the New Zealand consortium’s bid was $30 million lower than the Chinese offer, 74 percent still thought the local offer should be accepted.

The poll did not seek a view on the involvement of Sir Michael Fay, whose involvement in privatisations and the “winebox” tax avoidance inquiry in the 1990s largely undid the heroic reputation he gained as the backer of New Zealand’s first bids to win The America’s Cup.

He and business partner David Richwhite relocated to Switzerland in the late 1990s and have had a low profile in New Zealand until Sir Michael’s emergence as a “white knight” on the Crafar farms issue.

Some 78 percent agreed with the proposition that “not allowing foreigners buying the Crafar farms is a principled defence of New Zealand rights and sovereignty”, while 15 percent said it was “bowing to xenophobic and populist hysteria.”

Allowing a sale to Pengxin would be “bowing to Chinese economic power” in the view of just over half those polled.

However, when asked about investments involving Chinese companies in partnership with New Zealand companies, there was 66 percent support, and 56 percent support for the notion of shares in such Chinese companies being listed on the NZX for trading by New Zealanders.

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Comments from our readers

On 23 November 2011 at 1:49 pm btw said:
Don't forget Fay's insider trading involvement when you start referencing his credentials. Did UMR also ask those 500 polled if they were happy for their own assets to be similarly devalued by 15%($200M/$170M, or whether they have enough equity in their homes to absorb a 15% devaluation without their bank foreclosing?
On 23 November 2011 at 7:59 pm Alberre said:
What lengths Fay goes to when his own prospects are involved. Let's have a survey to ask if Fay should be allowed to buy the Crafar farms. I am against the sale of productive land to overseas interests - there is no value to NZ in doing so.
On 25 November 2011 at 11:01 am Mark said:
i Am unsure Why The Media Are holding Sir michael in Such Hi Regard over the chinese! Are We For Getting About the State our Railways Were left In! under his Involvement! He Escaped with a very healthy profit From The asset Stripping! And Shareholders Were Left Up The Creek! HHis Motive I am Sure, Will not be About loyalty To NZ!!!!
On 1 December 2011 at 5:03 pm Malcolm Watts said:
This is a bit rich coming from someone who profitted hugely from sales of public assets, many of which are now controlled by foreign concerns. And now I expect some of those profits are about to be spent on the next lot of cherries being offered by the National government. Is Fay simply trying to con the public into thinking he has NZ public interests at heart in order to regain some credibility? Some of us have long memories.
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