January 2000 decisions

The January decisions are unusual in that no less than two(!) applications were refused in the month, both involving land purchases. One application was also refused last month (December 1999). We have yet to see though whether this is because the new government, which took power in December, is more critical of applications.

Two refusals

An application to acquire the 331 hectare Wairoa Farm, 78 Silverstream Valley Road, near Mosgiel, Otago has been refused "as it was not considered to be in the national interest". The name and origin of the applicant, and the proposed price have all been suppressed. The proposal was that the property would be leased back to the vendors,

"initially for a period of one year. In the longer term, subject to a feasibility study, the Applicant proposes to phase out animal grazing on the property in favour of planting food crops intended mainly for overseas markets. The proposal is, in essence, a passive investment in farmland with a possibility that at some future date, it may be developed as a crop farming unit. Such purchases are not normally in the national interest."

An application by M. and B. Haufe of Germany to acquire 16 hectares at Dawsons Access Road, near Kaitaia, Northland for a suppressed amount has been refused "as it was not considered to be in the national interest". They were

"intending to acquire the land as a lifestyle property and proposed to construct a house on the property. The land comprises approximately 10 hectares of native bush which is the subject of a conservation covenant and five hectares currently used for casual grazing of cattle. The Applicant stated the land covered by the covenant would be preserved. The land has been subdivided from a larger lot specifically for sale as a life style block as it is deemed uneconomic for farming purposes.

The Applicants were acquiring the property to utilise as a residence once they had attained and taken up New Zealand permanent residency which was likely to occur in approximately two years. The proposal does not meet the existing "lifestyle policy" which requires any Applicant to normally have been granted New Zealand permanent residency status prior to making the application and to be in a position to take up New Zealand residency within 12 months of the date of any approval granted. If Applications cannot meet the policy, purchases are normally not viewed to be in the national interest."

Which is well and good, but inconsistent with, for example, two other applications approved this month – those for Christopher Moore Miller of the U.S.A. and P. and C. Humbert of Tahiti (see below).

SunGuard Data Systems of the U.S.A. buys Global Information Solutions

SunGuard Data Systems Inc of the U.S.A. has approval to acquire Global Information Solutions Ltd, which was 99.91% owned in Aotearoa, for a suppressed amount.

GIS is a highly successful and rapidly expanding company that specialises in writing software for treasury management in large firms. It was founded by Nigel Walkington and Lester Singleton, who each owned 21.76% of it, along with R. Walkington (21.74%) and D. Singleton (21.75%), R. Goddard (10%) and three smaller shareholders, all from Aotearoa except R. Snoek, (0.09%), who is from the U.S.A. The company has sales of $30 million a year and employs 100 people in Christchurch and another 100 providing customer support in offices in Australia, the U.K. and the U.S.A. Its customers include Shell, Phillips, General Motors, British Airways, Sun Microsystems and Swiss Telecom. Marketing has been done by KPMG.

Nigel Walkington told the Christchurch Press that the company was sold "because it needed access to capital and to marketing help from organisations dealing with ‘top-shelf’ companies of the world". They had had previous takeover offers and would not have been able to grow fast enough if they had not accepted this one. Though the OIC suppressed the price, the Press reported rumours it was at least $50 million (Press, 17/12/99, "Budding Chch firm snapped up by US", by Neil Birss, p.3). However the price was later revealed in document filed with the U.S. Securities and Exchange Commission: $US76.1 million or $164.2 million. Each of Singleton and Walkington would likely have received well over $50 million (Press, 6/07/00, “Huge price paid for Chch software  company”, p.15). Yet when the OIC released the price on appeal, it was different again: $136,160,000.

SunGuard also produces treasury management software, and GIS’s software will now be marketed under SunGuard’s name. GIS’s software is said to "enhance the functionality" of SunGuard’s, and software development will continue in Christchurch. But given the experience of the Linc software development effort being moved out of Christchurch after many years of success, the question must be asked: for how long will this one stay in Aotearoa?

Pikes Point Transfer Station acquires land from Northern Disposal Systems

Pikes Point Transfer Station Ltd, which is owned 50% by Waste Management New Zealand Ltd, 25% by Fulton Hogan Ltd and 25% by Northern Disposal Systems Ltd, is buying or leasing five hectares of land at the transfer station, at 81 Captain Springs Road, Onehunga, Auckland, from Northern Disposal Systems Ltd for a suppressed amount.

Waste Management New Zealand Ltd was at the time 60.1% owned by WMX Technologies Ltd of the U.S.A., but in March 2000 WMX began a sale of its shares by a public float. Fulton Hogan is 36.5% owned by Shell Plc of the U.K., and Northern Disposal Systems Ltd is owned by the Auckland Regional Services Trust.

"Pikes Point Transfer Station Ltd (PPTS) was incorporated in 1993 by Waste Management New Zealand Ltd, Fulton Hogan Ltd and Northern Disposal Systems Ltd. The sole function of PPTS is to operate the Pike Point Transfer Station in Onehunga, Auckland being a facility at which incoming waste deposited by the joint venturers and third parties is compacted prior to being transported to landfill for disposal. The sale/lease of the land from Northern Disposal Systems Ltd to PPTS is part of the restructuring of joint venture arrangements which will result in PPTS controlling all of the assets required to operate the transfer station. The proposed restructuring replaces the current arrangements whereby certain assets are owned by PPTS’s shareholders."

For more details on ownership of waste facilities in and around Auckland, see our commentary on the April 1999 OIC decisions: "Waste Management collects Waste Care from French owner".

Oil companies get together to consolidate land in Lyttelton

BP Oil New Zealand Ltd (owned by British Petroleum Company Plc of the U.K.), Shell New Zealand Ltd (owned by Shell Plc of the U.K.) and Mobil Oil New Zealand Ltd (owned by Mobil Corporation of the U.S.A.) have formed a joint venture which has approval to acquire ten hectares of land at Godley Quay, Lyttelton, Christchurch, Canterbury from the Lyttelton Port Company Ltd for an amount "to be advised".

"The proposed investment will see the Oil Companies’ individual resources currently spread over smaller and disparate areas of the Lyttelton Port Company Ltd’s land, in ageing facilities, consolidated within one area which will result in ease of operation and better utilisation of the capital intensive facilities needed to provide bulk supply and storage of petroleum products. The proposal has the support of Lyttelton Port Company Ltd as it will enable the port to look at better utilisation of its fairly limited land holdings in the Lyttelton Port area."

Rayonier buys 39,200 hectares of Otago/ Southland forest land from Ngai Tahu

Rayonier New Zealand Ltd, owned by Rayonier Inc of the U.S.A., has approval to acquire 39,213 hectares of land in forests in Southland and Otago from Ngai Tahu Holdings Corporation Ltd of Aotearoa. The price has been suppressed.

Rayonier acquired the Crown Forestry Licences over the land in 1992 (see our commentary on the May 1992 OIC decisions). Te Runanga o Ngai Tahu acquired the land on which the forests grow in its Treaty of Waitangi settlement with the Crown, but says that is "is not in a position to retain all of the land acquired".

The forests are as follows:

Forest Hectares
West Dome
Bare Hill
Total 29,138
Glen Dhu
Total 10,074
Grand Total 39,213

NZ Forestry Group buying 5,000 ha. near Wanganui with Taiwan investors

Parihauhau Forest Partnership, which is 90% owned in Taiwan has approval to acquire 690 hectares of land at Parihauhau Road, near Wanganui for $450,000 for forestry. The purchase has been organised by the New Zealand Forestry Group Ltd, which is owned 76% by Wesley Garratt of Aotearoa and 24% by J. Hong of Taiwan who are also shareholders in Parihauhau Forest Partnership. The Partnership intends

"to establish a commercial pinus radiata forest on the property. The proposal represents the first step in a programme by the applicant to acquire up to 5,000 hectares for forestry development. In essence the proposal is a joint venture between overseas persons who are providing capital for development purposes and a New Zealand forestry company which is providing the necessary expertise to the operation. A management contract has been entered into with New Zealand Forestry Group Ltd, a forestry management company, for the ongoing management of the forest estate."

Parihauhau Forest Partnership is owned as follows. All but Garratt are from Taiwan.

  • Hong Tai Group Trading Trust – 50%
  • Yeh Family Trust – 10%
  • Chao Family Trust – 10%
  • Kuo Family Trust – 10%
  • W. Garratt – 10%
  • J. Hong and S.W. Cheng – 10%

For the last similar sale organised by the New Zealand Forestry Group, see our commentary on the December 1999 decisions.

U.S. and Belgium residents buy 96 hectares to get East Cape forestry subsidy

Riverside Investments Ltd, which is owned by Charles P. Garrison of the U.S.A. (45%), Francois Mandy of Belgium (42.75%), Marie Deleuse of Belgium (2.25%), and T.F.C. Forests Ltd of Aotearoa (10%), has approval to acquire 96 hectares at Riverside Road, Gisborne for $247,500 from Coromandel Peninsula Realty Ltd. The land, currently a dry stock farm, is to be developed as a pinus radiata forest on 94 hectares suitable for the purpose. "The forestry development will form part of an intensive forestation programme being undertaken in the East Cape area which is being supported by a Ministry of Forestry subsidy scheme." T.F.C. Forests will manage the development of the forest.

Chinese state-owned company buys 103 hectares at Opihi for barley production

Pastorale Co. Ltd, which is owned by the Government of China, has approval to acquire 103 hectares of land at Gays Pass Road, Opihi, South Canterbury for $697,500 from C.G. and B.E. Lyon and the C. and B. Lyon Family Trust.

It appears to be a case of a company undermining its previous suppliers and vertically integrating its supply chain. Pastorale

"proposes to grow barley on the property for exporting to China where it will be used in the "Groups" [sic] beer brewery business. … currently barley is being sourced by the applicant from Australia. However following extensive tests in New Zealand the applicant has established that New Zealand grown barley is of a higher quality than that currently being purchased from Australia and accordingly wishes to establish a New Zealand growing operation. The operation will provide the applicant with a secure source of top quality optic malting barley."

AWASSI NZ Land of Saudi Arabia buys further 1,125 ha. in Hawkes Bay

AWASSI NZ Land Holdings Ltd, owned 90% by Hmood Al Ali Al Khalf of Saudi Arabia and 10% by George Antonios Assaf of Australia, has approval to acquire the 1,125 hectare Brookwood Station at Paulsen Road, Takapau, Hawkes Bay for $3,220,000 from the Brookwood Station Partnership of Aotearoa. AWASSI is "one of the largest importers of live sheep and cattle into Saudi Arabia, the Middle East and Gulf countries and has been operating in New Zealand since 1989. In addition, it is stated the applicant company has established a niche market for the export of live sheep (namely AWASSI fat-tailed sheep) to Saudi Arabia… The acquisition will assist in the further development of the AWASSI sheep breeding programme…"

In December 1997 we reported that AWASSI NZ Land Holdings acquired 134 hectares in Tikokino, Hawkes Bay, on the corner of State Highway 50 and Butler Road for $661,700. It was justified in almost identical terms to the present decision. In May 1997 we reported that AWASSI was given approval to acquire 70 hectares of land at Geraldine, Canterbury, for $270,000. That land was already utilised by AWASSI as a feedlot for its South Island live sheep export operation. The two had already acquired land in Hawkes Bay in June 1995 through their company, the Hmood Al Ali Al Khalaf Trading and Transportation New Zealand Ltd. That was 393 hectares of land for $2,050,000 to "establish the Awassi sheep, a middle eastern sheep … which is renowned for its milking capacity and the applicant also states a sheep milking industry can be readily established using Awassi ewes."

Other rural land sales

  • Christopher Moore Miller of the U.S.A. has approval to acquire three hectares of land at North Cove, Kawau Island, Auckland for $750,000 as a "lifestyle property". He is "currently applying for New Zealand permanent residency under the General Skills category. Mr Miller proposes to relocate his software development business from the United States to New Zealand and intends to reside on the property."
  • P. and C. Humbert of Tahiti have approval to acquire 0.5 hectares at 74 and 76 Wharf Road, Ostend, Waiheke Island, Auckland for $1,175,000. They "propose to seek and take up New Zealand residency and live on the property as a lifestyle property. They have business expertise in black pearl farming in Tahiti and propose to open a black pearl retail outlet on Waiheke Island or in Auckland."