In three decisions, the largest winemaker in Aotearoa, Montana, has first taken over the second biggest winemaker, Corbans, and then been subject to takeover attempt by the largest brewer, Japanese-owned, Lion Nathan. This is particularly significant given the rapidly increasing success of the wine industry as a new source of high value exports. That is emphasised by unrelated decisions this month in which a major French wine producer, Henri Bourgeois, has bought land to begin wine production in Marlborough, and a further vineyard acquisition by formerly New Zealand-owned Nobilo’s, now owned by BRL Hardy of Australia.
In one decision, Montana Group (NZ) Ltd (formerly Corporate Investments Ltd) gained approval to acquire up to 100% of Corbans Wines Ltd for $151,000,000 from DB Group Ltd. Montana is recorded as being owned
· 28.2% by Lion Nathan controlled in Japan (see below for details);
· 20.69% by P. H. Masfen (chairman, Peter Masfen) of Aotearoa (though other reports give his ownership as 19.9%);
· 13.04% by Australian Mutual Provident Society (AMP) of Australia;
· 7.08% by The Capital Group Companies Inc of the U.S.A.;
· and 30.99% in minority shareholdings in Aotearoa;
Corbans Wines Ltd was owned by the DB Group Ltd, which is owned 74.98% by Asia Pacific Breweries Ltd, and 25.02% in small shareholdings in Aotearoa. Asia Pacific Breweries is in turn owned 40% each by Heineken NV of the Netherlands and Fraser, Neave Ltd of Singapore, and 20% in small shareholdings in Singapore.
Corbans owns or leases 623 hectares of land in Gisborne, Hawkes Bay and Marlborough, comprising:
· 406 hectares freehold in Gisborne and Hawkes Bay at
· 130 hectares freehold in Marlborough at
and 87 hectares of leasehold at State Highway 63, Renwick, Marlborough.
Montana owns or leases 1,158 hectares of freehold land in Gisborne, Hawkes Bay, Marlborough, Palmerston North and Northland comprising:
· 472 hectares freehold in Gisborne and Hawkes Bay at
· 636 hectares freehold in Marlborough at
· 3.6 hectares freehold at Milson Line and Maiden Street, Palmerston North,
· 27 hectares freehold at 109 Monk Street, Waioneke, near Wellsford, Northland;
and 19 hectares of leasehold at 254 Eskdale Drive, Hawkes Bay.
DB Group had for some time been keen to sell Corbans. Lion Nathan’s rival in Australia, Foster’s Brewing (which owns Milbara Blass wines in Australia) was also reported to be interested (Press, 15/8/00, “Montana has its eyes on Corbans”, p.13).
Montana applied for clearance from the Commerce Commission for the purchase of Corbans on 11/8/00. The Commerce Commission made its decision on 6/9/00, approving the takeover. This was despite noting that “Montana Wines is the largest supplier of wine in New Zealand with turnover of $205 million for the 1999 financial year” and “Corbans is the second largest supplier of wine in New Zealand with turnover of $120 million for the 1999 financial year” (p.2 of the Commerce Commission decision – Decision No. 401). In terms of supply of grapes, “the merged entity would produce or have produced for it under contract approximately 39,000 tonnes of wine producing grapes. It would have a market share of about 50%. However 62% of this production would be contract production…” The next biggest producer would be Villa Maria (p.19-20). Almost all other market shares are suppressed from the Commerce Commission report.
But news media reports state that Montana will control about 60% of the domestic wine market industry after the takeover and the bulk of the $169 million export market (Press, 22/9/00, “New wine giant expected to sparkle on world markets”, p.11). And, as we will see, when PriceWaterHouseCoopers valued Montana in December, it stated that “the purchase of Corbans Wines has increased Montana Wines’ scale to a point where it will be virtually impossible for any competitor to match its domestic or export market position”. The company now had 57% of the domestic wines market by volume, and 49% of the export market. It also gives the following shares of supermarket sales as estimated by Montana management:
A significant effect may also be on prices paid to contract growers, who provide a sizeable share of the companies’ grapes. Montana will have over 2,700 hectares of viticultural land under its control, producing 40,000 tonnes of grapes and rising to 50,000 when all existing planted vineyards reach maturity (Press, 13/11/00, “Montana finalises Corbans deal”, p.19)
Montana, as its former name of Corporate Investments indicates, is more than a wine company, though it has steadily sold down its non-wine interests as its success in wines and problems with its other investments have grown. During the 2000 financial year, it sold Truck Investments (which it originally acquired as part of the Newman’s Group) and travel firm Go International, for a profit of $24.3 million. It closed Game Meats (NZ), causing redundancies and sold a 50% share in Frater Williams sharebrokers. It had sold the tourism assets of Newman’s, and a share of Nelson Pine Industries Ltd, in 1992. In 1997 it sold substantial property interests in Australia (ref PriceWaterhouseCoopers Independent Appraisal Report on Montana, 10/12/00).
Corporate Investments had a minority stake in Montana when the conglomerate first listed in 1985. It bought out a 40% interest from Seagrams in 1986, and gained 100% the following year. The vineyards themselves date back to the nineteenth century as the Church Road winery, Montana Wines being established in 1961 by the Yukich brothers. It was listed in 1973, when Seagrams took its 40% shareholding.
In the second OIC decision, Lion Nathan Ltd, headquartered in Australia but controlled by Kirin Breweries Ltd of Japan (46%), has approval to acquire 28.2% of Montana Group (NZ) Ltd (formerly Corporate Investments Ltd). The price is given as $18,393,523, but that is not for the full 28.2%.
The shares were purchased from Ron Brierley’s Guinness Peat Group, through its subsidiary, Ithaca (Custodians) Ltd at $2.60 each, according to a company announcement (“Lion Nathan completes purchase of Guinness Peat Group’s (GPG) 15.7 million shares in Montana”, 11/9/00). The $18.4 million figure given by the OIC is for just the 7.1 million shares (3.3%) that took Lion Nathan over the 24.9% limit, above which OIC approval is required. Lion acquired just under 25% earlier in the year, and its chief executive, Gordon Cairns, joined the Montana board in September 2000 (Press, 7/8/00, “Lion chief to join Montana board”, p.25).
This is not the limit of Lion Nathan’s ambitions however. On 21 November, the Commerce Commission announced that Lion Nathan had applied for permission to take over 100% of Montana (Commerce Commission media release 2000/122, “Lion applies for clearance to extend ownership of Montana to 100 percent”, 21/11/00). On 27 November, in a company announcement, Lion Nathan said it had “filed a Restricted Transfer Notice (RTN) with respect to Montana Group (NZ) Limited. The primary purpose of the RTN is to give Lion the flexibility, over the next seven months, to acquire further shares in Montana up to a maximum of 51 per cent of Montana’s ordinary shares.” One investment analyst suggested that Lion had done this in order to avoid changes to the takeover rules which will take effect in 2001 (Press, 23/11/00, “Foreign interest spark Lion move on Montana”, p.17). That would be consistent with its chairman’s, Douglas Myer’s, cavalier attitude to such niceties, as amply demonstrated in the tactics used in Kirin’s takeover of Lion itself (see our commentary on the takeover in April 1998). Interest in Montana from further afield may also have spurred Lion.
The same company announcement from Lion stated that “approval from the Overseas Investment Commission to buy up to 100% of Montana was granted at the time Lion increased its stake to 28%.” That OIC approval must be in a decision that has been suppressed almost in its entirety, which shows only the same date as the present decision, the next decision number, and identical business activities and regions involved. It shows the “proposed” overseas ownership as 67.5%, which corresponds to Lion Nathan’s overseas ownership.
The Commerce Commission predictably announced its approval of a full Lion Nathan takeover on 8 December. It said in a media release that
“Lion Nathan operates in various wine, beer and spirits markets, while Montana operates in several wine markets. The only markets in which there would be aggregation of market share would be the national markets for:
· production or importation of white wine for distribution
· production or importation of red wine for distribution
· production or importation of sparkling wine for distribution, and
· distribution of wine.”
It said that
“Lion Nathan has low market share in each of these markets and there would be very little aggregation. It is not likely, therefore, that dominance would be acquired in any markets through aggregation alone.
Some businesses told the Commission that they were concerned about the bringing together of Lion Nathan’s significant interests in beer and spirits markets, with Montana’s significant interests in wine markets.
The Commission took these concerns into account but concluded that the extent of competition that would remain in each market, the wide range of outlets available and the strong buying power of supermarkets would constrain a merged Lion Nathan/Montana.”
The Commerce Commission does not take into account dominance through sheer size, which was presumably the basis of concern of those businesses.
Lion gave notice that it intended to buy a controlling interest of 51%. It offered between $3.20 and $3.80 a share. In response, Montana chairman Peter Masfen, controlling shareholder until Lion entered the scene, also indicated an intention to bid for 51% at the same range of prices. He had already made clear he would not sell his shareholding, and one investment analyst said “you could almost say it is a declaration of war” (Press, 5/12/00, “Masfen takes Montana fight to Lion Nathan”, p.14). Neither Lion nor Masfen were making any actual commitment to buy.
An independent valuation by PriceWaterhouseCoopers (PWC) commissioned by independent Montana directors released on 13/12/00 put the value of the shares well above these offers: between $4.16 and $4.64, based on the acquisition of Corbans. It cited the “unique and virtually unassailable market position” of Montana as a major factor in its valuation (see details above). PWC’s judgement was therefore that the offers from Lion and from Masfen were not fair to other shareholders. The independent directors advised shareholders not to sell, while Lion, unsurprisingly, dismissed the valuation, refusing to budge from its offer. At its annual meeting in Sydney in December, Chairman Douglas Myers said the company believed it had “established an excellent foundation for a significant new business for Lion Nathan” but chief executive Gordon Cairns attacked the PWC valuation saying it “did not have credibility in the market place”. Nevertheless, Lion had clearly done very well in its purchase from GPG at just $2.60 per share (Press, 13/12/00, “Montana bids corked”, p.33; 16/12/00, “Lion digs claws in on Montana price”, p.24; 20/12/00, “Lion earnings up as beer sales fall”, p.25). That PWC was also Montana’s auditor, which might be a conflict of interest in making the valuation, was dismissed by the independent directors (Press, 2/12/00, “Auditor doubles as sale advisor”, p.24)
Lion Nathan is in total 67.5% overseas owned. GPG (through Ithaca) is 33.14% according to the OIC, so the share purchase increases the overseas ownership of Montana to 39.16%.
Other than the controlling ownership of 46% by Kirin, Lion is owned 15.3% in Australia, 5.9% by Morgan Stanley Asset Management Ltd of the U.S.A., 0.14% in the U.K., a further 0.04% in the U.S.A., 0.12% by others “who may be overseas persons”, and the remaining 32.5% in small shareholdings in Aotearoa.
GPG is owned 19.61% in Australia, 11.23% in the U.K., 1.3% in France, and 1% in the U.S.A. However this counts Brierley himself among the New Zealand shareholders, even though he no longer lives here.
Sarl Domaine Henri Bourgeois, owned 95% by SA Henri Bourgeois and 5% by J.M., R. and R. Bourgeois and R. Padoy of France, has approval to acquire 91 hectares of land in at Mooney Valley, State Highway 63, Renwick, Marlborough for $2,417,850 from The Moonee [sic] Valley Family Trust of Aotearoa.
The OIC says that the company, “who is a major French wine producer, intends to become an active and productive member of the wine industry in New Zealand” to meet increasing demand for its wines. “This need has led them to focus on other premium wine producing areas, hence the search for premium level vineyards in other areas of the world…”. The company “intends to construct a winery to be ready to process its first harvest in 2004, and is likely to have the potential to process 500-600 tonnes of fruit”. It will not blend the wine in order to preserve the “unique character” that “each vineyard’s soil gives the resulting wine”. Henri Bourgeois believes that “the property offers the right location for the Sauvignon Blanc and Pinot Noir vines to thrive”.
According to NZPA, Henri Bourgeois is based in the French wine-making region, the Sancerre Valley, and produces almost two million bottles of wine a year for export to 55 countries. It quoted company president, Jean-Marie Bourgeois, saying that the company had been searching for 12 years for land outside France to expand its operations, and had considered South Africa, California, Chile, Argentina and Australia (Press, 29/9/00, “French latest to snap up soaring Marlborough land”, p.15).
Nobilo Vintners Ltd, owned 100% by BRL Hardy Ltd of Australia, has approval to acquire 47 hectares of land at Fernhill, Hawkes Bay for a suppressed amount. It consists of 3.2 hectares at Moteo Pa Road, and 44 hectares at Moteo Pa which is an existing vineyard. Nobilo’s has “plans to expand its grape supply in the Hawkes Bay region”.
The company previously owned 167 hectares of land (142 hectares in Marlborough, including four hectares at Hammericks Road, Blenheim; and 25 hectares at Hapai, west of Auckland) and leases 38 hectares at Mohaka, Waihua, Hawkes Bay.
In a decision that has a number of unusual aspects, Ceebay Holdings Ltd, which is 75.1% owned by Amaltal Corporation Ltd of Aotearoa and 24.9% owned by Maruha Corporation of Japan, has been given permission to “continue to hold or acquire fishing quota, interests in quota, annual catch entitlement and provisional catch history” which covers 10,637.7 tonnes of Hoki, 425.4 tonnes of Squid, and 187.1 tonnes of other species. It has owned and managed the quota since 1992. The quota is about 4% of the Hoki quota available, and about 1.8% of New Zealand’s Total Allowable Commercial Catch, but it “is a ‘strategic’ stake in the sense that it is the largest block of quota available for fishing against that is independent of the larger fishing companies and the Treaty of Waitangi Fisheries Commission”, according to the OIC. Ceebay does not fish the quota itself, but leases it to New Zealand fishing companies.
Amaltal is a 50/50 joint venture between Talley’s Fisheries Ltd and Amalgamated Marketing Ltd, a subsidiary of the Amalgamated Dairy Group.
The first unusual aspect of this decision is why it was required at all. On the face of it, Ceebay is less than 25% overseas owned, and is therefore entitled to own quota without permission from the OIC, the Treasurer and the Minister of Fisheries. However the ownership structure of Ceebay is considerably more complicated than the shareholding percentages portray. Firstly, the Japanese partner, Maruha, has two of the four directors on the Board, with the chair having no casting vote, and therefore has a much higher degree of control than its shareholding suggests. It apparently asked for a ruling from the OIC because of this. Underlying this is a suggestion that the company’s structure was designed to circumvent the law. Secondly, not only is the representation on the board of directors unusual, but the company also has a special share structure that pays Maruha 99% of the dividends and gives it “enhanced liquidation rights”. Amaltal holds 751 “A” shares, and 75.1% of the voting power, while Maruha holds 249 “B” shares which give it those additional rights (source: Ceebay Constitution). It justifies this position by its “substantially larger capital investment in Ceebay”. This suggests that Maruha all but bought the quota from Amaltal, but since it was not permitted to own it, the two companies agreed to set up this structure to allow Maruha to benefit from the quota while complying with the letter of the law. Maruha holds its shares through a subsidiary which was originally called Tafico Holdings (1992) Ltd, but has changed its name to Maruha (N.Z.) Corporation Ltd.
The Fisheries Act 1996, as amended in 1999, gives two criteria for overseas control:
i) The right to exercise or control the exercise of 25% or more of the voting power at any meeting of the company (which is true of the Board of Directors); or
ii) 25% or more of any class of shares in the company (which is true of the B shares: Maruha owns 100% of the B shares).
The second unusual aspect is the background to this legislation, which involved some strong words from Japanese fishing companies, including Maruha. In October 1998, both Maruha in its own right, and the Japan Deep Sea Trawlers Association (based in Japan) made submissions on the Fisheries (Retention of New Zealand Control) Bill. This private member’s bill of Labour MP Jim Sutton was intended to bring into effect the overseas ownership provisions of the 1996 legislation. That legislation defined an overseas company as being one that is 25% or more overseas owned, but also put an absolute limit on overseas control of quota at 40%. It was absolute in the sense that no exceptions could be granted beyond that point, unlike the provisions and practice under the previous (1983) legislation. Breaches of these provisions could lead to forfeiture of the fishing quota, without compensation. The more stringent ownership aspects of the 1996 legislation, brought in under the influence of New Zealand First which was then in coalition with National, were never brought into force despite having been passed by Parliament.
Sutton made clear his view why the provisions were not brought into force in his speech during the debate on the second reading of his bill in Parliament:
“The Japanese corporates brought pressure to bear on our Government not to implement those sections of the Fisheries Act 1996, and I have a great sheaf of cable traffic from the Ministry of Foreign Affairs and Trade to prove it. Our Ministry of Foreign Affairs and Trade advocated on behalf of Japanese corporates, so our Government agreed to defer until at least October 1999 the implementation of those provisions. I have asked for the updated cable traffic, under the Official Information Act, but I still have not received it. The last lot I got showed the Japanese demanding an input into our policy considerations and extracting a promise that there would be a complete review of all New Zealand laws covering overseas investment.” (Hansard, 23/9/98)
He also cited an ownership structure very similar to Ceebay’s as a reason for needing the tighter legislation:
“The Parliament never had in its mind that this would be other than a New Zealand resource. However, we found that lurking around this world there are some crafty lawyers and they devise company structures whereby there are two classes of shares. For example, a company might have 100 class A shares, which trade for 1c; 24 percent are owned by a foreign corporation and 76 percent are owned by lawyers, who happen to represent the corporation on other matters here in New Zealand. But the lawyers do not mind casting their votes in a cooperative way because those class A shares pay no dividends. There might be 10 million class B shares that have no voting rights but which attract all the benefits of ownership---all the dividends---but which ostensibly exercise no control. Thus the benefits of the resource may fall into the hands of overseas people. Of course, in reality the control has gone there too. But on paper legally the control is still in our hands.”
National opposed the bill, on the grounds that it was about to conduct a review of the overseas ownership provisions of the legislation, and asked “why foreign control is necessarily a bad outcome for the fisheries sector”. It supported foreign ownership on the grounds that it enabled New Zealand fish to evade Japanese tariffs:
“When fish are caught by a vessel from another flag State, for customs purposes those fish are deemed to be a product of that flag State. For example, when squid is caught in New Zealand waters by a Japanese-flag vessel that squid is a product of Japan. As the squid is a product of Japan, there is no tariff to pay and there are no quantitative restrictions.” (David Carter, Associate Minister for Food, Fibre, Biosecurity and Border Control, Hansard, 23/9/98.)
Other National speakers used arguments whose significance will become apparent. In a bizarre twist, the bill passed its second reading with the support of ACT, whose relish for the free market apparently broke down without a blush at its glaring inconsistency.
In its October 1998 submission, Maruha took strong objection to the suggestion that the 1996 ownership clauses be brought into force because they did not allow existing companies, if they became classed as overseas controlled under the legislation, to gain an exemption from the government, even up to the 40% limit. Ceebay would no longer be entitled to hold quota if the law came into force. This objection had been voiced by National speakers in the above debate. Exemptions were allowed only for new entrants to the industry. Maruha compared it to the Overseas Investment Act, where any degree of exemption is allowed (and almost always given), and submitted that the same should hold for fishing quota. They also sought under the 1998 Bill a “grandparenting clause” which would allow existing quota owners to continue to hold their quota.
Otherwise, their submission said, “Maruha considers that this will amount to a statutory deprivation of property rights, without compensation”. That wording suggests that they were positioning themselves for an action against the government. The wording is also significant in that it would trigger expropriation clauses such as the highly controversial ones in NAFTA and the proposed Multilateral Agreement on Investment, which give investors compensation rights, or even the ability to force law changes, in such circumstances. Similar clauses are in Investment Promotion and Protection Agreements in force between New Zealand and both China and Hong Kong, and which have been signed but not yet brought into force with Chile and Argentina.
The significance of these words was underlined by a supporting submission by the Japan Deep Sea Trawlers Association. It wrote that it “humbly wishes to submit that the proposed bill is ill-conceived based on prejudices and distortion of facts, contrary to the principle of free trade and investment, discriminatory, and grossly unfair to the past and current contributions to New Zealand fisheries”. The reference to “the principle of free trade and investment” is very significant in this regard. The less than humble series of pejoratives are sketching a case that any “expropriation” or “deprivation of rights” or “confiscation” would not be in the public interest, and would not be non-discriminatory. The expropriation clauses mentioned above allow “expropriation” as long as it has those ingredients – in the public interest, and non-discriminatory – and is accompanied by full compensation. If those ingredients are not present, then an international tribunal could rule that the law itself is in breach of international agreements and the government could be forced to change it, as happened with the Canadian government, under the NAFTA provisions, earlier in 1998.
For example, an Investment Promotion and Protection Agreement between New Zealand and Hong Kong, which came into force in 1995, provides as follows (Article 6):
“Investors of either Contracting Party shall not be deprived of their investments nor subjected to measures having effect equivalent to such deprivation in the area of the other Contracting Party except lawfully, for a public purpose related to the internal needs of that Party, on a non-discriminatory basis, and against compensation….”
If Maruha had simply used a Hong Kong subsidiary to own its share in Ceebay, it would have been able to take action under this agreement – potentially to have the law overturned or compensation paid.
Similarly, if the MAI had not met its demise in the face of public opinion at about the same time as these submissions were being made, a case could have been made through the channels that provided.
Reinforcing this position, Japan Deep Sea Trawlers Association wrote that
“the bill must therefore be construed as a flagrant attempt at forcibly eliminating legitimate and trustworthy partners of Japan from existing legal fishing ventures – de-facto confiscation of their right to participate in fishing or at best forced sale of their assets on the buyer’s market. The bill is, both in its intent and effect, in sheer contradiction with the principle of fair deal and of free trade and investment which your Government is pursuing in WTO, APEC and other international areas.”
Again, National speakers had anticipated the free trade and investment argument in the parliamentary debate. Carter again:
“A number of other issues need to be considered, and I will mention these briefly. The first is the inconsistency between this Bill and the position that New Zealand has taken globally in respect of trade liberalisation, particularly within the fisheries sector. The New Zealand fishing industry is an export-orientated industry, because 95 percent of its production is targeted to foreign markets. New Zealand has everything to gain from increased trade liberalisation and better access to markets globally. In fact, New Zealand has been one of the world leaders in promoting the benefits of trade and investment liberalisation and documenting the costs associated with trade protectionism. Early commencement of the foreign investment provisions of the Fisheries Act 1996 would obviously place New Zealand in an awkward position in restricting foreign investment opportunities in New Zealand, while, at the same time, we attempt to continue to promote trade liberalisation globally.”
In the event, the 1998 bill was not passed until 1999, and then in a watered-down form that mimicked the Overseas Investment Act – much as Maruha had suggested and National had been seeking. However it still required Ceebay to obtain the current approval. For further details of the circumstances surrounding the 1999 legislation, see our commentary on the refusal of a number of applications to buy Brierley Investments Ltd’s half share in Sealords (May 2000) or Foreign Control Watchdog No. 95, December 2000.
The final unusual aspect to this approval is that surrounding Maruha itself. It was raised by both Green Party co-leader, Jeannette Fitzsimons and United New Zealand Party Member of Parliament, Peter Dunne. In a press release (3/8/00, “Who Decides Who Fishes In Our EEZ?”), Dunne made the baldest statement of the case:
“My concern is based on research I have completed on Maruha, one of Japan’s largest fishing companies. The evidence prepared by the Ministry of Fisheries shows that Maruha is:
* Trading in illegal Toothfish;
* Catching Minke Whales in Antarctica;
* Subject to United States Court proceedings for price fixing in the American salmon market;
* Providing false information to the New Zealand Overseas Investment Commission.”
He expressed surprise that “the Maruha application is moving smoothly through the New Zealand vetting process, raising no ripples at all… I see absolutely no reason why companies like Maruha should be allowed in our waters at all”. In a second release the same day, he called on the Government to ban all foreign fishing companies with whaling interests from operating within New Zealand’s Exclusive Economic Zone (3/8/00, “United: Ban All Whaling Companies From Our EEZ”).
Fitzsimons followed in September with a call to “follow the lead of the United States and ban Japanese fishing boats from New Zealand waters in response to Japan’s expanded whaling effort. The United States Government yesterday banned Japan from future access to fishing rights in US waters and has threatened economic sanctions if Japan does not curtail an expanded hunt on whales.” (Green Party Press Release, 15/9/00, “NZ Should Look Closer To Home On Whaling – Greens”.)
She summarised her case on National Radio’s Kim Hill Show, in a discussion of the issues with Hill and Minister of Fisheries, Pete Hodgson (25/9/00):
“Well, Maruha was one of the three largest whaling companies in the world until very recently. It then sold down some of its whaling interests about a couple of years ago I believe and now holds only a minimum amount. But the thing is it has made a lot of its wealth from whaling. It still makes some of its wealth from whaling and there are also very well documented reports which the Minister says are not proven but which I find convincing that it is a central player in the landing and marketing of illegal Tooth Fish caught from the southern oceans. Now the reason this is an important precedent is that the legislation under which the Ministers have to grant this exemption to a foreign company to own quota in New Zealand states first of all that the company must be of good character. Now that good character test has now been defined by this precedent case as including going whaling and probably being involved in illegal tooth fish catching and I think it just makes us look non credible when we argue internationally for better behaviour on the sea.”
The two Ministers in releasing their consent to Ceebay’s application said only that they had
“also considered allegations that Maruha has been involved in whaling and illegal fishing for toothfish.
‘It appears that Maruha’s involvement with whaling is at the minimum required of all major fishing companies in Japan, while the allegations of toothfish poaching are both unproven and strongly denied,’ said Mr Hodgson. ‘Maruha’s connection with whaling is a concern, but it would be both ineffective and unfair to attempt to punish a single company for a national practice. New Zealand will continue to advocate vigorously in the appropriate international forums for an end to whaling, by Japan or any other nation.’”
(New Zealand Government press release, 22/9/00, “Ceebay Fishing Quota Holding Approved”)
Dunne and Fitzsimons objected, Dunne saying it had “destroyed New Zealand’s credibility as an anti-whaling nation”, while Fitzsimons complained that the government had “set a dangerous precedent in declaring companies involved in whaling to be ‘of good character’”. (United New Zealand press release, 22/9/00, “New Zealand Destroys Anti-Whaling Credibility”; Green Party press release, 22/9/00, “Company linked to whaling has ‘good character’”).
Arguably, the Ministers could not have refused Ceebay’s application on the basis of the evidence alluded to by the Greens and United New Zealand as to the “good character” of Maruha. The “good character” provision applies only to individuals controlling the company, not the behaviour of the company itself. A company can be as bad as it likes and still pass the “good character” provision, as rulings by the OIC to CAFCA have shown in other cases. Nonetheless, the Ministers could well have decided that on balance the public interest was not served by allowing Maruha to continue its control of the quota.
Undoubtedly though, the posturing by the company, by the Japan Deep Sea Trawlers Association, and by the “Ministry of Foreign Affairs and Trade advocating on behalf of Japanese corporates”, referred to by Sutton, served their function in intimidating the Ministers by making clear that a rejection would lead to a legal battle, and possibly to consequences in wider trade relationships. Sutton’s (and Labour’s) courage in opposition has not extended to government.
Maruha has been active in Aotearoa since the 1950s, originally as Taiyo Fishery Co. Ltd. In its 1998 submission it says:
“Maruha is the largest fishing company in Japan. As at 31/3/98 it had assets of Y454 billion (NZ$7.3 billion) and current sales of Y978 billion (NZ$15.7 billion)… Maruha has introduced new fishing technology and fishing methods such as box netting, eel farming, trawl fishing and long line snapper fishing to New Zealand as well as the ikijime method of snapper preparation so that snapper can be exported fresh. Maruha also pioneered scallop farming in New Zealand in the late 1970s. Maruha has been a partner to a number of Maori fishing interests in the far north and Gisborne areas and has also been involved with substantial businesses in the crayfish industry. Tribal groups with which Maruha has had a direct or indirect involvement include Ati Awa, Raukawa, Ngati Apa, Ngati Porou, Ngati Ruanui, Taranaki and Rangitane.”
Its leading role in introducing these technologies may be debated by local fishermen. Its acceptance by Maori is certainly not universal as Dover Samuels made clear in the 1998 Parliamentary debate:
“I will come straight to the point because this issue involves New Zealand sovereignty – tino rangatiratanga is what it is called. I know that all the Maori members of this Parliament would support this Bill, because if they do not, they have lost their tino rangatiratanga overnight, and they do a lot of talking about it.”
He spoke of foreign fishing ships “continually exploiting and raping the sovereignty of this nation”, and added – significantly in the light of the above discussion on international treaties –
“The sustainability of the New Zealand fishery is close to the hearts of Maori people. If we remember the debate of the Multilateral Agreement on Investment this year, that debate went around all the Maori maraes. One of the reasons that they were very cautious related to our New Zealand fishery and our New Zealand sovereignty.” (Hansard, 23/9/98)
Most interesting in Maruha’s submission was its dominant role in exports of fish to Japan. It exemplifies the intra-firm trading which according to the United Nations constitutes 30-40% of all world trade, thereby bypassing the open market:
“Maruha plays a significant role in increasing export market access for New Zealand exporters and is the largest importer of New Zealand fish into Japan, accounting for approximately 40% by value of all New Zealand fish exports to Japan. (In the 1997 calendar year total New Zealand exports to Japan were NZ$278 million, while Maruha imported fish products with a value of approximately NZ$110 million in the year ending 31/3/98.)”
Maruha has another subsidiary in Aotearoa, Kingfisher Ltd, which exported $23.3 million in fish products in the year ending 30/9/98.
A corporate profile provided with the submission reported that “Maruha is a partner in 30 overseas joint ventures, located in 18 countries”, partners including governments as well as private corporations. As well as fishing, it has extensive operations in jewellery, furs, seasoning, healthfood supplements, pharmaceutical and cosmetic ingredients, cold storage facilities, aquaculture, feeds, livestock, food processing, research and development.
Commonwealth Bank of Australia (CBA) has approval to raise its shareholding from 75% to 100% in the ASB Group Ltd, which owns the ASB Bank, for $56,000,000. It is purchasing the remaining shareholding from the ASB Bank Community Trust, the remains of the originally community owned Auckland Savings Bank. The Trust sold 75% of the bank to CBA in 1989.
That leaves Taranaki Savings Bank as the remaining bank of any significance with any New Zealand ownership. It is significant that TSB, followed by ASB, regularly rate amongst the highest in customer surveys of banks in Aotearoa. For example, the Consumers Institute, in their October 1999 customer survey (see http://www.consumer.org.nz/banks/r_results.html) concluded that “The National Bank and TSB Bank, along with PSIS, rated above average on all five indicators. ASB Bank wasn’t far behind, rating above average on four counts and average on the fifth. All these are excellent results.” On the other hand, the survey revealed “a very poor commitment to service by two major banks. One is ANZ, and the other WestpacTrust.”
Consumer commented on the successful ones: “How do these banks do so well? One factor is that both PSIS and TSB Bank are locally owned. We’re not suggesting foreign-owned banks can’t provide good service (The National Bank gives the lie to that). But it may be that for a local retail bank to survive, it must focus on smaller customers and serve them very well.”
Regarding WestpacTrust, Consumer noted that
“WestpacTrust was formed from the merger between Westpac, which typically rated poorly in our previous surveys, and Trust Bank, which typically rated well. We’ve been waiting with interest to see which ‘service culture’ would prevail in the new bank. Now we have the answer: the dead hand of Westpac has killed off the customer service standards for which Trust Bank was renowned.”
ASB has largely avoided the Westpac syndrome to date. It will be interesting to see if that continues under full CBA ownership. One disadvantage it has is that its Managing Director and Chief Executive, Ralph Norris, is the very vocal head of the Business Roundtable, who has continued the Roundtable’s line of being hypercritical of anything but a purist free-market direction, running into considerable trouble with the Labour/Alliance government.
ASB, which absorbed its Westland Savings Bank subsidiary in 1994, has been expanding, both in banking – in 1998 it claimed it was the fastest growing bank in Aotearoa (other than by acquisition) – and into new areas. In November 1998, it bought life insurance and funds management company, Sovereign Ltd for $238,400,030 (see our commentary for that month). It recently acquired the retail stockbroking operation of Warburg Dillon Read New Zealand. It is smaller than the Big Four banks, and may be trying to make up for it in diversification of services.
It is interesting that the OIC approval includes amongst ASB’s business activities “Education Services”, but doesn’t clarify what that covers. It also includes property services.
ASB owns 0.9 hectares at Weita Road, Orewa, Auckland, and eight hectares at Albertson Avenue, Mt Albert Auckland.
WestpacTrust, a 100% subsidiary of the Westpac Banking Corporation of Australia, has approval to acquire the residential mortgage portfolio and the Freedom Loans portfolio of The National Life Association of Australasia Ltd, a 100% subsidiary of AXA of France. The price has been suppressed.
In three decisions showing barefaced cheek, Hoyts Cinemas (NZ) Ltd, which is a subsidiary of Hoyts Cinemas Ltd of Australia, and Village Force, itself a joint venture between Force Corporation Ltd and Village Roadshow Ltd, have been given approval to unwind a 50/50 joint venture approved by the OIC in August 1999. The two chains operate about 70% of the cinema screens in Aotearoa and the merger proposed in 1999 brought strong reactions from independent cinema operators and court action to stop it by the Commerce Commission (see our commentary for August 1999).
Yet in 1999, the OIC happily approved it saying that “the substantial resources of the new Joint Venture will allow financially viable investment in new entertainment complexes in New Zealand and the cinema industry in general”, and that it would “achieve cost efficiencies and other synergies”. Not a shadow of concern about possible loss of competition: nirvana would be achieved through dominance of the industry. Yet now they are approving the unwinding of the arrangement “for commercial reasons based on a reassessment of the financial and commercial benefits held by the parties making up the [joint venture]”, saying that the benefit is that it “is likely to lead to added competition in the film exhibition market in New Zealand, based on analysis undertaken by Commerce Commission”. Not a blush in sight.
Force, however was more forthright. In its announcement of the unwinding, it admitted that the Commerce Commission had effectively defeated the merger, saying “While participants believe the New Zealand joint venture could be supported under current law, the management time and costs involved in a protracted legal battle with the New Zealand Commerce Commission would negate any benefits to be derived from the merger” (Company announcement, 7/9/00, “Force Corp joint venture with Village Force to unwind”).
The assets involved in these decisions include one hectare of leasehold at 392 Moorhouse Avenue, Christchurch (Hoyts Eight), which returns to Hoyts, and the Force Entertainment Centre, 267 Queen Street, Auckland, on 0.46 hectares of land, which returns to the Queen Street Joint Venture. The latter is owned 33.34% by Village Roadshow, 33.33% by Hoyts, and 33.33% by Force Corporation. The price for the unwinding is suppressed by the OIC, but the price in August 2000 for the formation of the merged operation was a total of $100 million.
Village Force owns and operate 13 cinema complexes in Aotearoa; Hoyts, through subsidiaries and affiliates owns and operates nine cinema complexes. They also manage other cinema complexes and have other interests in third-party-owned complexes.
Force is 50.19% owned by its chairman, Peter Francis (according to Datex), and is in total 85% owned in Aotearoa, but is 15% owned by Shamrock Holdings, the Californian company which tried to take control of Brierley Investments in 1998. Shamrock is controlled by the family of Roy E. Disney, a nephew of Walt Disney (Press, 20/7/99, “Shamrock buys into Force”, p.27). Force was the subject of an insider trading investigation by the Securities Commission concerning share transactions around the time of a proposed (but also failed) merger with internet service provider, ihug, in February 2000. The investigation completed in August 2000, with an announcement by the Securities Commission that “in the event the Commission was not able to establish on the evidence that the persons who had bought shares had possession of inside information about the proposed merger between Force Corporation and ihug.” (Force Corporation company announcement, 30/8/00, “Securities Commission reports on Force insider trading inquiry”).
Force’s financial position was not eased by the forcible separation. At the company’s annual meeting in December 2000, shareholders were told by Francis that “admissions to cinemas were down considerably over the corresponding year”, in what he said was an international trend. The company was also engaged in heavy-duty litigation with MTM Funds Management of Australia over the purchase of the $75 million entertainment centre in central Auckland which Force had built under an agreement that MTM would purchase it and lease it back on completion (see our commentary on the March 1998 decisions). Force was also contending with an “unsatisfactory return on the investment in Argentina” which was “in its worst economic situation in 20 years”, and the May coup in Fiji, which had “cost the company dearly”. Force was selling all its property, except West City in Auckland, to Westfield, the owner of leading mall owner, St Lukes, and leasing it back. “The long-term plan, which could take up to ten years to complete, will see all Force cinemas as an integral part of a shopping centre.” It reassured shareholders that dividends would be resumed as soon as possible (Press, 13/12/00, “Cinema downturn hurts Force Corporation”, p.33).
Hoyts is controlled by Australian tycoon, Kerry Packer, through his company, Consolidated Press Holdings (Press, 17/5/99, “Packer wins fight for Hoyts”, p.33).
Champion Industries Inc, owned by Luciano Berti of Italy, has approval to acquire Washtech Ltd which is owned by Gary Colin Brent and Bridget Mary Brent and family of Aotearoa. The price paid has been suppressed. The company owns 0.9 hectares of leasehold land at 410-414 Rosebank Road, Avondale, Auckland.
Champion Industries is “primarily involved in the manufacturing, distribution, and service of commercial warewashing machines”. (We assume “warewashing machines” is industry jargon for dishwashers.) The company intends to expand in the New Zealand market, having recently acquired an Australian commercial dishwashing equipment business, and is “in an expansion phase”. It intends to increase the production capabilities of Washtech machines, including implementing new technologies, and is acquiring the company’s business interests in Australia as part of the deal.
Hertz Fleetlease Ltd, formerly known as Fleetlease Ltd, and owned by the Ford Motor Company Ltd of the U.S.A., has approval to acquire the motor vehicle leasing business assets of Hertz New Zealand Ltd for a suppressed amount. Hertz New Zealand is owned 80% by Ford, and the remaining 20% by other shareholders in the U.S.A. The acquisition is “part of a global initiative to leverage the ‘Hertz’ brandname and create synergies between the Hertz and Fleetlease car leasing operations”.
Banyon Tree Holdings Pte Ltd, which is owned equally by Mr Hwee Liang Tee of Singapore and Mr Ariel Pamatmat Vera of Singapore has approval to acquire Noy Holdings Ltd for $6,306,760. Hwee Liang Tee was also a 49.005% shareholder in Noy Holdings, which was 49.005% owned by Mr Kwon Ping Ho of Singapore and 1.99% by Mr Graeme Morris Todd of Aotearoa. Noy Holdings owns 1.2 hectares of land at Thompson Street and Lake Esplanade, Queenstown, Otago on which they propose building a “five to six star hotel”. The takeover by Banyon is “to enable a public float, which will provide future development capital”, and will “result in Noy Holdings being part of a substantial group with the financial and related resources to fund the proposed hotel development project…”
Pacific Steel Ltd, a subsidiary of Fletcher Challenge Ltd (Fletcher Challenge Building), has approval to acquire 2.5 hectares of land at Favona Road, Manukau, Auckland, from the Manukau City Council for $675,000. “There already exists on the proposed site a water treatment plant and a stormwater treatment plant, which is operated by the applicant in conjunction with the operation of its manufacturing plant on adjoining land.” The acquisition “will enable the informal arrangements that exist for the use and operation of the plant to be placed on a better standing. The applicant also intends to construct a warehouse and storage facility on the property.” According to the OIC, Fletcher Challenge Building is owned 39% in the U.S.A., 37% in Aotearoa, 10% in Australia, 9% in the U.K., and 5% in Singapore.
· The J & J Family Trust of Taiwan has approval to acquire 16 hectares at Ruakiwi Road, Ngaruawahia, Waikato from New Zealand Forestry Group Ltd for $96,720. The sale is like many in other regions organised by New Zealand Forestry Group, which is owned 76% by Wesley Garratt of Aotearoa and 24% by J. Hong of Taiwan. The J & J Family Trust is a member of the Ruakiwi Forest group which “has entered into an arrangement with New Zealand Forestry Group to develop approximately 245 hectares of land at Ngaruawahia. Approximately 233 hectares of the land is afforested with the balance comprising forestry roads and unplantable areas due to contour”. Members of the group provide the money, while New Zealand Forestry Group manages the development of the forestry operation. The last such sale was in May 2000.
· Similarly, the Huang Family Trust and the Viga Family Trust of Taiwan have approval to acquire 11 hectares and 21 hectares (respectively) at Creek Road, Wanganui from New Zealand Forestry Group Ltd for $45,780 and $84,420 respectively. Both Family Trusts are members of the Mahuri 2000 Forest Owners Association which “has entered into an arrangement with New Zealand Forestry Group to purchase 226.5 hectares of land near Wanganui. Approximately 194.4 hectares of the land is plantable with the balance comprising scrub with a small area of native bush”.
· Highland Timber Plc of the U.K. has approval to acquire 134 hectares at Shannon Forest, Horowhenua District, Manawatu, for $348,750 for forestry. Some of the land is in native bush. The acquisition is “a further step towards reaching” the company’s long term plan which “involves owning either freehold and/or forestry rights in 40,000 hectares of New Zealand forestry land”. We have reported previous acquisitions by Highland in December 1997, of 212 hectares at Wanganui, and 452 hectares at Te Haroto Napier, Hawkes Bay, from Fletcher Challenge Forests Ltd; in May 1998, 259 hectares at Kinleith from Carter Holt Harvey Ltd’s subsidiary New Zealand Forest Products Ltd; and in September 1998, 172 hectares of forestry cutting rights in the Rangitumau Forest, Wairarapa, and in Manawatu, 86 hectares of forestry cutting rights in Shannon Forest, 208 hectares of forestry cutting rights in Aokautere Forest, the 143 hectare Lake Alice Forest, and the 378 hectare Matauri Mara Forest, from three companies in receivership. (See those months for further details.)
· A joint venture 51% owned by Nelson Forest Products Company, owned by Weyerhaeuser Company of the U.S.A., and 49% by RII New Zealand Forests I, Inc, of the U.S.A., has approval to acquire 12 hectares of land at State Highway 6, Canvastown, Marlborough for $200,000 from W.B. and C.C. Burrough of Aotearoa. The joint venture “has 168 hectares of planted Pinus Radiata forest in the Wakamarina Forest, access to the forest has recently been withdrawn, resulting in a situation where [the joint venture] is unable to harvest trees it has already purchased”. Part of this purchase will be used to create a road into the forest and the remainder will be planted in trees.
· Mari Hill Harpur and J.J. Hill III of the U.S.A. have approval to acquire the 4,297 hectare Cainard Station, 485, 515 and 533 Cainard Road, Southland for $2,025,000 from the government-owned Landcorp New Zealand. It is currently used primarily for sheep and cattle farming but 1,500 hectares are intended to be immediately developed into a Douglas Fir forest. In April, the OIC approved T.R.D. and M.H. Harpur of Canada purchasing the 2,228 hectare Garondale Station, Peel Forest, South Canterbury, for $2,474,998. M.H. Harpur is the same Mari Hill Harpur in this Southland decision, but the OIC does not explain the change in nationality from Canada to the U.S.A. Garondale was used mainly for sheep and cattle farming and the Harpurs intended to develop a 1,400 hectare Douglas Fir forest on the property, They were already partners in a deer breeding business based at the nearby Peel Forest Estate.
Waiaua Bay Farm Ltd, owned by Julian Hart Robinson of the U.S.A., has approval to acquire 389 hectares at Hikura Road, Kaeo, Northland from Ross Snodgrass Family Trust for a suppressed amount. According to the OIC,
“In 1994 the applicant received approval to acquire approximately 1,600 hectares of land near Kerikeri. Since acquiring the property the applicant has constructed a 18 hole golf course, called Kauri Cliffs, on part of the property, which opened to the public on 1 February 2000. A clubhouse and lodge are also being developed on the property and are expected to be completed in December this year.”
These leave only 712 hectares for farming, and the land in this decision adjoins the existing property, allowing Robinson to “reinstate the land available for farming purposes”. However, “part of the land may be used in the future as a second golf course”, and “approximately 140 hectares is planned to be onsold to a neighbouring farm owner”.
The 1994 purchase was approved in December 1994, when we reported:
In a land sale with clear conservation values, a 1,605 hectare block of rural land near Kerikeri is being sold to J.H. Robertson [sic] of the U.S.A. for an undisclosed sum. The farm was owned by Tepene Tablelands Ltd, owned by members of the Williams family for the E.O. Williams Trust.
“The Commission is advised that Mr Robertson has a close affinity with New Zealand having lived here for over 12 months during the 1970s. He has strong conservationist values, has a very high regard for the relatively unspoilt New Zealand environment and is essentially in this purchase realising a dream for himself and his family to invest for the future in this somewhat remote part of the world and make his contribution to conservation and the better use of under-utilised rural resources.
“The Commission is also advised that Mr Robertson’s principal purpose is to use his capital to bring marginal farmland to full production, to develop timber plantations in suitable areas and to contribute to the conservation of native bush and birdlife and natural features worth preservation. In this regard an area of the property which includes a giant Kauri tree and areas of native bush and known as the Williams Family Reserve will be preserved and developed to become a Queen Elizabeth II National Trust Reserve or a similar type of reserve pursuant to the Resource Management Act or the Reserves Act.”
So how did it end up as a golf course?
· Lisa J. Kaiser of the U.S.A. has approval to acquire six hectares of land at 914 Southhead Road, Helensville, Auckland from Macnut Farms Ltd of Aotearoa for $220,000. Kaiser proposes to operate the land as a “commercially viable macadamia grove producing high quality macadamia nuts for the local market and possibly for exporting.” She intends to develop the existing “neglected” orchard and extend its size from 500 to 2,000 trees.
· Xiou Qing Zhang and Jianhua Zhou of China have approval to acquire five hectares at 118 Motu Road, Kumeu, Auckland for $1,000,000 from Auckland Farm Ltd. They “are seeking to take up permanent residency in New Zealand under the Long Term Business Visa category” and intend to set up a company, Superior Poultry Products Ltd to operate a poultry products business on the property producing broilers for the domestic market, continuing an existing business operated by Auckland Farm Ltd. The new company will continue a guaranteed supply contract with Tegel Foods Ltd held by Auckland Farm. They “intend to work closely with Tegel Foods Ltd and investigate the potential for a possible penetration of the Chinese export market through business contacts in that country”.
· Jun Ro Kim and Su Youn Kim of Korea have approval to acquire five hectares at 187 Taupaki Road, Kumeu, Auckland, for $730,000. They “have applied for permanent residency under the Business Investor category” and intend to reside on this land as a “lifestyle property”. Their children already reside in Aotearoa and attend school in Kumeu.
· J. and B.T.A. Lai of New Caledonia have approval to acquire seven hectares of land at 119-121 Totara Road, Whenuapai, Auckland for $820,000 for market gardening. They “intend to take up New Zealand permanent residency” and further develop “what is currently a Nashi production market garden”, including garden vegetables and “a bird rearing operation for table meat production of chicken and duckling to be sold in New Caledonia”. They have 21 years market gardening experience.
· The Ingleby Company Ltd of the U.S.A. has approval to acquire a further substantial station. This time it is the 2,180 hectare Pakira Station, at Te Kumi Road, Hicks Bay, Gisborne, which it is purchasing from Pakira Station Ltd for $5,460,984. It will be run with cattle and sheep for meat and wool, and “will be made available for research work by Massey University postgraduate students”. Note that another company, AliceClaire Properties Ltd of the U.S.A., received approval to acquire the same property in August 2000 – but for only $3,375,000 (see our commentary on that month’s decisions). Ingleby won the bidding. In March 2000 we reported that Ingleby had approval to acquire two blocks of land of 414 hectares and 175 hectares at Paekaka Road, near Piopio, in the King Country. In September 1999 it received approval to acquire the 3,616 hectare Puketiti Station, also near Piopio.
· In February 2000, P. Fong of Singapore was given approval to acquire one of the blocks being sold from Closeburn Station on the Glenorchy-Queenstown Road, Queenstown, Otago. This month, he is transferring ownership of the property to his children: W.H. Fong of Singapore (50%), M.W.L. Fong of Singapore (16.67%), C.W.L. Fong of Japan (16.67%), and L.W.Y. Fong of Hong Kong (16.67%). The station is owned by J. F. Investments Ltd, which is 70% owned by David Salman of Indonesia and 30% by D. Broomfield of Aotearoa. They are subdividing nine hectares of the station as “lifestyle properties” into 27 residential allotments, each of which will have a share of the remaining approximately 999 hectares which will still be farmed (see our commentary on the July 1998 decisions for details). J F Investments “intends to directly invest approximately $5.5 million into the development and improvement of the farming activity” on the station, which will come from the sale prices of the residential lots. The sale was of 0.37 hectares plus a 1/27th share of the remaining station (37 hectares), for $562,499. The land adjoins Lake Wakatipu and conservation land. There is no indication that any of the Fongs is intending to reside on the land, or has permanent residence. It seems likely that P. Fong is the same P. Fong who is involved in Woodlot Farm Ltd, which is involved in a golf course and housing development near Queenstown. It is owned by Shotover Golf Estate Ltd, which is owned 35% by P. Fong of Singapore, 35% by D. Salman of Indonesia, 15% by D. and E. Broomfield of Aotearoa, and 15% by B. Washer of Aotearoa. Shotover owns approximately 81 hectares of land near Queenstown.
· Quidnet Ventures Ltd, which is owned 50% each by Yvonne Bregman and Dr Mark Bregman of the U.S.A., has approval to acquire 20 hectares at Lowburn North, State Highway 6, Cromwell, Otago, for $264,375 from J.G. Darby, R.J. Hay and Cabo Limited Joint Venture. The joint venture selling the property is 50% owned by Tusher Family Limited Partnership of the U.S.A. (presumably the owner of Cabo Ltd), and 25% each by J.G. Darby and R.J. Hay, both of Aotearoa. Quidnet intends to plant grapes on the land for wine production, under a management agreement with a New Zealand company, Lake Hayes Vineyard Ltd, which will carry out all vineyard operations.