April 1998 decisions

Three refusals

Winston Peters has clearly been in a declining state of mind this month, as he has refused three applications involving purchases of land. Perhaps stung by public criticism of the number of land sales continuing during his reign, he or the Minister of Lands has, on the grounds that they were not considered to be in the national interest, declined:

  • An application by Mr Jacob Van Der Eijk, of the Netherlands, to acquire up to 26% of Van Der Eijk Farming Company Ltd. The land involved was in Canterbury but its exact whereabouts, the proposed seller and price have been suppressed. It was to be used for horticulture.
  • An application by Madam Hsueh-Yu Yang, a resident of Taiwan, to acquire arable land "which exceeds five hectares" for "residential construction and subdivision" in Auckland. Again, the proposed seller and price are suppressed.
  • An application by Mr Henry Andersen of the U.S.A. to acquire land in Auckland "which exceeds five hectares" for lifestyle purposes. Details of land, seller and price are suppressed.

Mitsubishi’s Kirin Breweries of Japan takes control of Lion Nathan

Both major breweries in Aotearoa are now overseas controlled. Kirin Brewery Company Ltd of Japan has approval this month to acquire up to 51% of Lion Nathan Ltd for a sum "yet to be advised" (this was advised in July 1998 as $1,330,853,079.60). DB, the other major brewery, which has 35% of the market, chasing Lion’s 54%, is 58.39% owned by the Singapore/Netherlands Asia Pacific Breweries (see decision below under Other Rural Land Sales in reference to its subsidiary, Corbans Wines Ltd).

The takeover was myered in controversy. Chairman Douglas Myers took full advantage of the country’s Wild West takeover rules – those which were advocated by the Business Roundtable which he headed for many years. The Kirin offer was a limited one. It bought Myer’s 15.6% holding at 540 cents and offered the same price for only a further 29.4% of the company’s shares. Australian investors – whose rules would have forced an offer to all shareholders – were angry. The Australian Financial Review’s columnist, Chanticleer, headlined the offer as a "real shocker", saying Myers and his fellow directors had pocketed most of the takeover premium and left many of the institutional shareholders high and dry. Its business editor, Giles Parkinson, writing in the New Zealand Herald, quoted an unnamed Australian fund manager as saying: "Morally, what they did was a disgrace" (quoted in the Press, 5/5/98, "NZ takeover rules upset Australians", p.37).

Director of International Equities of the Oakmark Funds, U.S.A., David Herro, made similar points: "The timing of the sale process itself was done unethically. It was early evening in the United States and in the middle of the night in Europe. Did British fund managers even have a chance at selling any shares? Unlikely." Such events, he said, "will scare foreign investors out of the New Zealand market due to the higher risk premium attached to New Zealand shares because of the Third World corporate standards." It was "the sort of thing that causes people to lose faith in capitalism" (New Zealand Herald, 13/5/98, "‘Third World’ rules put sharemarket at risk", p. E1; "Untethered Lion scares foreign investors", p.E2). Remember that: the former head of the Business Roundtable is scaring away foreign investment and causing people to lose faith in capitalism. Next thing, he’ll be making a takeover bid for CAFCA.

Investment analyst, Brian Gaynor, writing in the New Zealand Herald under the headline "It’s a steal!", wondered at the appropriateness of "one of the country’s largest companies" changing control in "a few frantic seconds on the stock exchange" rather than allowing shareholders to consider the offer as they would have in Australia. "Australia marches in line with the rest of the world. New Zealand is completely out of step", he concluded, having listed examples where overseas investors have failed to add value to New Zealand companies: International Paper in Carter Holt Harvey and Camerlin in Brierley Investments (New Zealand Herald, 2/5/98, "It's a steal!", p.E2).

Although the OIC gave approval for 51% of shares to be sold, in fact 45% was sold, with an assurance from Kirin that it would not increase its holding without Lion’s approval. Of the 45%, 15.6% came from Myers, 5% from small shareholders with less than 10,000 shares, and 24.4% from large shareholders – first in, first served. Among those taking advantage of the few minutes to sell were Lion directors. Myers made $461 million. Other directors who Bryan Gaynor was able to show sold substantial proportions of their shares over the period, were Robin Congreve (originally owning 4.7 million shares), Alan Gibbs (137,000), Chris Mace (17.6 million), Geoff Ricketts (6.3 million), Kevin Roberts (330,000), and Mike Smith ( 1.3 million). Their personal benefit from the deal led to questions as to whether they had put their interests ahead of other shareholders (New Zealand Herald, 16/5/98, "We will have the lager, you can have the bitter", p.E2). Competing offers were reportedly rejected.

None of this should have been a surprise: it was consistent with Myers’ track record. Douglas and his father, Sir Kenneth Myers, bought out the family’s hotel and liquor company, Campbell and Ehrenfried, in circumstances that set parts of the family against each other. Share trading led to a shareholders’ court case in 1976 which, after long appeals, resulted in a $2 million out of court settlement. He bought a 19.9% controlling interest in Lion Breweries for $27 million in 1981, in a sharemarket raid which led to a Securities Commission investigation into dawn raids. In 1988 Lion took over L.D. Nathan by paying Fay Richwhite and Co. 920 cents cash per share for its 35%, while offering only one Lion share per L.D. Nathan share to all other shareholders – worth only about 560 cents a share. Again, it led to Securities Commission investigations, which found in Myers’ favour. Since then, according to Brian Gaynor, Myers main contribution to Lion Nathan has been in clever buying and selling of assets rather than improving efficiencies. When $2.2 billion of intangible assets – largely brand values – are put aside, the company has negative shareholder funds. Myers’ purchase of assets in Australia, and more recently in China (reportedly a strong attraction to Kirin, although it already has its own operations there) mean that Lion Nathan is a true transnational corporation in its own right, with 69% of its assets in Australia, 6% in China, and only 25% in Aotearoa (New Zealand Herald, 28/4/98, "Lion sale marks end of an era in NZ business", by Brian Gaynor, p.D2; Press, 25/4/98, "Fortune hands on Lion talks", p.23, and 29/4/98, "The $460m question", p.28). Myers remains chairman of the company for a further three years.

Though Lion makes huge efforts to identify itself as a Kiwi icon, it has not been majority owned in Aotearoa for some time – though it has been well in Myers’ control. Its 1996 Annual Report, for example, put its overseas shareholding at 52%. That makes it likely that its current overseas shareholding is at least 60-70%.

Kirin is the largest brewer in Japan with 39% of the beer market, its lead threatened by Asahi Breweries with 38.5%. The takeover makes Kirin the fourth largest brewer in the world. It is a diversified company however: it also sells dairy products, flowers and vegetables, yeast-related products, biochemicals and pharmaceuticals. The Canada-based Rural Advancement Foundation International lists it as the tenth largest food and beverage company in the world in 1996 ("The Life Industry 1997", http://www.rafi.ca/communique/fltxt/19976.html). It runs restaurant chains, bottles Coca Cola in both Japan and the U.S.A., and owns the Raymond Vineyards in California. Group sales were $22 billion in the last financial year (Press, 28/4/98, "Kirin's top spot faces challenge", p.30). According to its Website (http://kirin.topica.ne.jp/english/annual/prin_.html), it has subsidiaries in Australia, Brazil, China, Germany, Hong Kong, Kenya, Netherlands, South Korea, Spain, Taiwan, U.K., and the U.S.A. It has over 8,000 employees.

If it does not have much to offer in improving standards of brewing (see below), it does have experience to offer in establishing new lows in business ethics. According to the Japan Times on-line (http://www.japantimes.co.jp/news/news10-97/news10-24.html, 24/10/97) it was one of "at least" three Mitsubishi companies tied to "sokaiya" payoffs in 1997. Sokaiya are racketeers, often gangster-linked, who extort money from corporations by threatening to expose dubious business practices and disrupt shareholders meetings. Japanese law prevents corporations paying out to ensure corporate solidarity. Japan Times reported that the companies were "suspected of sending funds to a bank account linked to two ‘sokaiya’ corporate extortionists arrested earlier this week over illegal payoffs from Mitsubishi Motors Corp., police sources said". The extortionists were named as Terubo Tei, also known as Teiji Nakamoto, and Kaoru Hamada. The other two firms named were Mitsubishi Electric Corporation, and Mitsubishi Estate Co. Each was suspected of sending up to several million yen into the account, and investigators were trying to determine whether the payments by Mitsubishi Electric and Mitsubishi Estate amount to illegal payoffs, which are banned under the Commercial Code.

"Kirin Brewery stopped such cash transfers in 1993, when executives of the firm were arrested in connection with payoffs to other racketeers, according to the sources. The three-year statute of limitations under the Commercial Code has expired on those payments by Kirin."

Asako Ishibashi of Nikkei reported on 3/11/97 (http://mercury.nikkei.co.jp/enews/SPECIAL/back/nomura/nomura44a.html#gen163):

"In 1993, four officials at Kirin Brewery Co., Japan’s top beer maker and a Mitsubishi group member, were arrested for making illegal payments to a number of sokaiya extortionists. In the process of this investigation, police found that Kirin was delivering beer to the beach house linked to Tei. After further investigation, police discovered the bank account, to which more than 20 companies were making payments."

Kirin is heavily involved in genetic engineering. Its own Web site (http://www1.kirin.co.jp/english/corpo/operat/bio.html) boasts the further development of "FLAVRSAVR, a genetically engineered tomato developed by Calgene, in Japan." It is doing genetic engineering research based on yeast. "The goal of the research is to mass produce mammalian, which includes human, glycoproteins" (http://www.burrus.com/sampleissue.html, Technotrends Newsletter). Transgenic cold-tolerant tobacco is the subject of another research effort (http://foodnet.fic.ca/research/jsmay96.html#kirin, Japan Sci/Tech News, May - July 1996).

It is prepared to sue to protect its genetically engineered products: Kyodo News reported from Tokyo on 27/10/97 (http://home.kyodo.co.jp/cgi-bin/nbStory/971027) that

"Kirin-Amgen Inc., a U.S. firm owned equally by Kirin Brewery Co. of Japan and Amgen Inc. of the United States, sought a court order Monday against Snow Brand Milk Products Co. to protect a patent on the manufacture of an anaemia treatment, Kirin Brewery said. Kirin-Amgen established the genetically engineered manufacturing technology for the drug, erythropoietin, and acquired a patent for it worldwide, Kirin Brewery said in a statement."

It also has a patent, with the University of Pennsylvania, over an African plant that may yield a highly profitable naturally sweet protein that could compete with the US$2 billion low-calorie sweetener market:

"Researchers at Kirin Brewery (Japan) report in the May, 1997 issue of Nature Biotechnology that they have successfully coaxed genetically engineered yeast cells to produce the sweet protein monellin at levels exceeding the yields of monellin from serendipity berries, the West African plant (Dioscoreophyllum cumminisii) from which the protein is naturally extracted."

(Rural Advancement Foundation International, September/October 1997, http://www.rafi.ca/communique/fltxt/19975.html#ENT21.)

On pharmaceuticals,

"Kirin has intensified its pharmaceuticals-related R&D efforts. We have identified two fronts on which to develop our business in this area: the franchising of blood-, cancer- and kidney-related products, and research into fields related to the development of products to treat ailments of the cardiovascular and immune systems, and allergies."

It is significant that the sale includes a block of five hectares of land at Khyber Pass, Newmarket, Auckland, with an unimproved value of $14.7 million. This means that the decision by the OIC and the Ministers of Finance and Lands should have taken into account the extended criteria required for transactions involving land. These criteria (unlike non-land investment) take account of the public interest, defined in terms of job creation, new technology or business skills, increased export markets, increased competition, efficiency, productivity or enhanced services, additional investment for development purposes, or increased processing of our primary products. The decision sheet released by the OIC shows no indication such issues were taken into account. It only records the belief by the two companies that the transaction will be of benefit to them (especially) and "to the local and New Zealand economy". An inquiry to the OIC revealed that the land criteria were considered – but this serves to show only how weak the OIC’s and the Ministers’ scrutiny is. Benefits the OIC quoted in a letter to CAFCA (14/7/98) included

  1. the development of export markets and increased market access for New Zealand products particularly into Asian markets including China and Taiwan;

  2. the introduction of new technology through an information exchange from Kirin; and

  3. increased productivity and efficiencies within the existing business operations of Lion

Regarding (a), the suggestion by analysts was more the other way round: that Lion would develop new markets for Kirin. On (b) and (c), Brian Gaynor again: "The Japanese are not world leaders in brewing and it is unclear what value Kirin can add to Lion… One of the more obvious reasons for the purchase is that Kirin has $4.7 billion of cash and market securities burning a hole in its pocket. With Japanese interest rates below 1%, … [this] is one way of obtaining a higher return on these funds" (New Zealand Herald, 28/4/98, "Lion sale marks end of an era in NZ business", p.D2).

Tourism Holdings Ltd buys Mount Cook Group

In a decision initially almost completely suppressed and released only on appeal, in August 1998, Tourism Holdings Ltd has approval to acquire the coach, travel, light aviation and alpine guides divisions of The Mount Cook Group, a subsidiary of Air New Zealand Ltd, for $22,500,000. Tourism Holdings is largely New Zealand owned and controlled but "has estimated slightly in excess of 25% of the shares are being held by various overseas persons", and is therefore legally an overseas company (for example, AMP owned 13.3% at the beginning of 1998 according to Datex’s New Zealand Investment Yearbook 1998, p.130).

The property being acquired is

  • "the business assets and undertakings" of
  • Mount Cook Landline Division (i.e. coaches);
  • Mount Cook travel and travel wholesaling operations (offshore and within Aotearoa);
  • Mount Cook General Aviation Division (scenic flightseeing at Mount Cook) including the Mount Cook Group’s 70% interest in Tourism Flightseeing Partnership (scenic flightseeing at Queenstown and Milford Sound); and
  • Up to 56% of Alpine Guides Mount Cook Ltd.

About 165 Mount Cook staff lost their jobs in the sale, and 55 transferred to the new owner (Press, 20/5/98, "Mt Cook Group sale leaves 165 staff without jobs", p.3).

Tourism Holdings was formerly The Helicopter Line, and has investments in transport and tourism in Aotearoa, Australia, Fiji and North America. Its operations include campervans, rental cars, tour coaches, rafting, jetboats, heliskiing, Red Boats and guided walks along the Milford track, hotels, and tourist facilities such as Treble Cone skifield, Kelly Tarlton’s Underwater World, Artic Encounter, and the Waitomo Caves. The company has not fared well in recent years (Datex, op cit.). It is chaired by Murray Valentine, a Dunedin chartered accountant, who is also associated with Apple Fields Ltd, Cardinal Group, Kiwi Income Property Trust, Mr Chips Holdings, Limited, Milburn New Zealand Limited, Alpine Deer Group Limited, and Whale Watch Kaikoura Limited.

Degussa of Germany buys Du Pont’s hydrogen peroxide plant in Morrinsville

In a decision initially almost completely suppressed and released only on appeal, in August 1998, Degussa Aktiengesellschaft, of Frankfurt, Germany, gained approval to acquire Du Pont Peroxide Holdings Ltd, a subsidiary of E.I. Du Pont de Nemours & Company of the U.S.A. Du Pont Peroxide presumably owns the hydrogen peroxide plant Du Pont established in Morrinsville (Press, 31/7/91, "Call for paper mill investment"): it owns nine hectares of land in Walton Road, Morrinsville. The price is still suppressed. The OIC states:

"Degussa AG is an international chemicals company with significant activities in precious metals and pharmaceuticals… the proposal reflects Degussa’s long-term strategy to establish itself as a global leader in peroxygen chemicals."

Lend Lease of Australia buys 50% of Kiwi Income Properties companies

Lend Lease Property Investment Services Ltd, a subsidiary of Lend Lease Corporation Ltd of Australia, has approval to acquire up to 50% of Kiwi Income Properties Ltd, Kiwi Property Management Ltd, KDT Management Ltd, and KDT Development Ltd. The price has been suppressed. The unit trusts managed by the offeree companies own a number of retail, commercial and industrial properties, including 21 hectares of land, at 286 Mt Wellington Highway, Auckland, and an area of land "which includes or adjoins land subject to a Historic Places Order", namely the 0.4230 hectares of land in the Royal Sun Alliance Centre, situated in Shortland Street and Fort Street, Auckland.

As we reported last month, Kiwi Income Properties Ltd, which at that time was 50% controlled by FCMI Financial Corporation of Canada, and the remainder by New Zealand residents, manages Kiwi Income Property Trust. The companies and trusts own substantial property in the central business districts of the main centres.

Sime Darby of Malaysia buys 80% of Continental Car Services, Auckland

Sime Singapore Ltd, which is 69.1% owned by Sime Darby Berhad of Malaysia, has approval to acquire Continental Car Services Ltd from Mr T. E. S. Bailey, "a British citizen and prominent Motor dealership businessman in Auckland". It has approval to acquire 100%, but has apparently bought only 80% for $8.4 million. Sime sees it as an opportunity to expand into Aotearoa. The managing director and all existing employees of Continental will continue to be employed.

Jang Investments of South Korea buys Ascot golf course, Christchurch

S. W. Jang Investments Ltd, owned by Mr Seung Woo Jang of Seoul, South Korea, has approval to acquire 19 hectares of leasehold land in Frosts Road, Christchurch and "the business assets and undertakings" of New Zealand Premier Golf Ranges Limited for $1,940,000.

"The vendors wish to divest their interest in the golf course/driving range facilities located in Christchurch, in order to free up capital for other investments. The applicants, who own several properties located in and around Christchurch, wish to acquire the property in order to expand their existing property portfolio. It is stated the current employees of New Zealand Premier Golf Ranges Limited will continue to be employed. Furthermore, the applicant proposes to further develop the golf course/driving range which is likely to result in additional employment opportunities and the introduction of capital for development purposes."

This is the Ascot golf course and driving range beside the Queen Elizabeth II Park Stadium, owned by the Christchurch City Council, which formerly operated it but now leases it to the operator. New Zealand Premier Golf Ranges is based in Auckland, and took a 20 year lease five years ago. It pays a percentage of earnings from the course, range and shop to the Council. Councillor Gail Sheriff said the Council had "made it very, very clear that this is a public facility and it is imperative that it remains that way." Any increases in prices or alterations to the facility would have to be approved by the Council.

Mr Jang lives in Korea but visits Christchurch regularly "and intends to settle here with his family" according to the Press. He has appointed a Christchurch-based Korean manager. A Council report said Mr Jang had "substantial and successful business interests in Korea as well as commercial and residential property in Christchurch". Real estate and banking checks had been positive. (Christchurch Mail, 30/3/98, "Koreans make $1.8m bid for Ascot gold course", p.1; Press, 11/4/98, "New deal for golf course", p.5.)

Select of the U.K. takes over Andrews Partners Recruitment

Select NZ Ltd, owned by RTT International Sarl, a subsidiary of Select Appointments (Holdings) Plc which is publicly listed in both the U.K. and U.S.A., has approval to acquire Andrews Partners Recruitment Ltd and Andrews Partners Recruitment (Australia) Ltd for $11 million. "It is stated the acquisition forms part of Select’s overall strategy to build its world-wide clientele and complement its existing New Zealand business activities."

Earnscleugh Station, Otago sold to Australian-led gold mining joint venture

Approval has been given for the 2,574 hectare Earnscleugh Station in Central Otago to be sold to the Earnscleugh Joint Venture for $1.5 million. The joint venture is 82.35% owned by Mintago Investments Ltd, a subsidiary of Perilya Mines NL of Australia, and 17.65% by March Mining (Central) Ltd of Aotearoa. The purpose of the joint venture ("the Earnscleugh Project") is to establish a "substantial gold mining operation". The mine will require only a 50 hectare area forming part of the Earnscleugh Flats. The joint venture is negotiating to sell the balance of the land.

The Otago Daily Times reported in October 1997 that the project would be an alluvial mine. The company was proposing a two-stage mining operation, the first beginning at the southern end of the Earnscleugh Flats in the vicinity of Blackman Rd. Depending on the viability of the first stage, it would then move north towards Laing Road, covering a total area of about 620 hectares – considerably more than in this approval. Stage one, which would take between nine and 15 years to complete, was expected to yield about 230,000 ounces of gold and employ about 50 staff in addition to local consultants and industries. The mine would employ an open pit of about 400 metres by 200 metres, and about 25 metres deep, affecting an area of about 50 hectares at any one time, progressively restoring the land as the mine pit advanced. The plant would be in operation 24 hours a day, seven days a week, and mining would begin in late 1999, subject to obtaining resource consents. Environmental impacts would include disruption to groundwater supplies and road and communication links in area. The Fraser River’s flow and path would be disturbed. (Otago Daily Times, 2/10/97, "Earnscleugh mine details released", p.18.)

Indonesian buys Closeburn Station, Queenstown, for farming and subdivision

RMI Resources Ltd, the principal shareholder of which is David Salman, a national of Indonesia, has approval to acquire the 935 hectare Closeburn Station on Glenorchy Road, Queenstown, Otago for a sum "to be advised". Closeburn is owned by J.F. Investments (New Zealand) Ltd, and RMI has approval to acquire up to 70% of it.

"The proposal provides for the introduction of venture capital required to establish a 21-27 lot residential subdivision development on part of the property known as ‘Closeburn Station’, Queenstown. The lots themselves will be marketed towards buyers looking to become part of the concept of a marriage of the protection of a high country farming station, conservation values and lifestyle living. The establishment and sale of the residential lots will provide capital that will enable the farming operation of ‘Closeburn Station’ to be preserved, developed and operated as an economic unit. The proposal will result in the protection and development of the conservation features contained in and adjoining the property and provide guaranteed public access to those features."

Salman has a number of other investments in Queenstown including an interest in 17 hectares of land at Tuckers Beach Road near Queenstown, for residential subdivision; and Woodlot Farm Ltd, a Singapore/Indonesia owned company involved in a golf course and housing development near Queenstown.

Owner of Coleridge Downs (U.S.A.) swaps land with ECNZ

Coleridge Downs Ltd, owned 95% by members of the Erdman family of Hawaii, U.S.A., and 5% by Barry Hopkinson of Aotearoa, has approval to acquire approximately 21 hectares of land around the Coleridge village, near Lake Coleridge. The company owns the 1,899 hectare Coleridge Downs station, which adjoins the Coleridge Power Station. The 21 hectares is being exchanged by its owner, the Electricity Corporation of New Zealand, for "certain easements" over Coleridge Downs station which it required for the sale of the Coleridge Power Station.

Canterbury Business Monthly (May 1998, "Landowners annoyed at lake land swap") reports that the land swap has annoyed local landowners. The land is in and around the Coleridge village, and the locals fear the character of the village could be changed by the tourist-related activities the Erdmans say they will develop. "They also have concerns about the adequacy of reserves normally set aside in such circumstances." Two other locals were keen to buy, and see the sale as giving preference to the Erdmans. No tender was called. Canterbury Business Monthly goes on:

"The Coleridge Village Residents Association took up the matter with Treasurer Winston Peters. In a letter he indicated that their concerns would be taken into consideration by the Overseas Investment Commission. But the OIC gave the go-ahead on April 9. OIC Secretary Stephen Dawe says there is no explicit mechanism for third parties to make submissions about applications, although letters or information are taken into account."

The power station was eventually sold to a consortium of Alpine Energy of Timaru, and TrustPower of Tauranga for $90.6 million.

The members of the Erdman family involved are Sumner Pardee Erdman (owning 23% of Coleridge Downs Ltd), Christian Pardee Erdman (23%), and Calvin Pardee Erdman (49%). The family has owned the 20,000 acre Ulupalakua Ranch on Maui, Hawaii, since 1963. The Ranch includes the Tedeschi Vineyards, which offer such delicacies as the Maui Blanc Pineapple Wine, as well as more conventional wines (ref: http://206.154.205.20/~mol/activityland/tedischi.html).

We reported in June 1994 that the Erdman family was buying Coleridge Downs Farm Ltd near Darfield, Canterbury for a total of $1.8 million via Catterick Holdings Ltd. The OIC said then that

"The Erdman family have extensive agribusiness interests and experience in the U.S.A. The Erdmans state that they propose to carry out extensive developments to Coleridge Downs which is likely to result in a doubling of the current 10,500 stock units over the next five years."

Roths of Canada buy further land near Carterton, Wairarapa

Forest Securities Ltd, owned by W.E. Roth Corporation of Canada (51%), J. E. Roth of Canada (39%), and P.L. and W.E. Kerr of Aotearoa (10%), has approval to acquire 156 hectares of land on East Coast and Driscolls Roads, Carterton, Wairarapa for $220,000.

"The property which has been extensively marketed since 1996, is currently described as an uneconomic farming unit, which is better utilised for forestry purposes. In this regard, all the adjoining properties have been converted to forestry resulting in an improved economic utilisation of the land. The applicants intend to develop the property for afforestation purposes utilising the management/expertise of New Zealand forestry consultants. Additionally, the applicants intend to utilise the property for grazing purposes in conjunction with their existing 776 hectare property located within the Carterton District."

The 776 hectare purchase was approved in April 1997. We reported:

"Joan Elizabeth Roth of Canada and W. E. Roth Construction Ltd of Canada, which is owned by William Roth, are buying a 90% interest in the 776 hectare Caledonian Station, Flat Point Road, Flat Point, Carterton, Wairarapa, for $900,000. The other 10% will be owned by their daughter and son in law in Aotearoa who will manage the farm. ‘The applicants intend to invest significant capital in the property by improving the productivity of the farm and developing forestry and farmstay ventures.’ It appears to be used currently for sheep and beef farming."

Accor of France buys more land for its Novotel Queenstown Hotel

Raffles Queenstown Ltd, which is a subsidiary of Tourism Asset Holdings Ltd, listed in Australia but majority owned by AAPC Ltd, a subsidiary of Accor of France, has approval to acquire 0.1737 hectares of land next to the Novotel Queenstown Hotel for $65,000. It is buying the land, which adjoins conservation land, from Alpine Properties Ltd.

"In January 1997 Raffles Queenstown were granted consent to acquire 1.0920 hectares of land in Queenstown, representing the land on which the Novotel Queenstown Hotel is situated. The land, the subject of this application, comprises two residential sections, which are located directly next to the Novotel Queenstown Hotel. Although zoned for residential use, it is stated the land is too steep for the purpose of which it was intended [sic] and the sale has been openly marketed, resulting in little interest. Raffles state they propose to incorporate the land into the hotel’s existing development plans which in the shorter term include the landscaping of the area in order to provide a pleasant outlook for guests located on the first floor of the Novotel Queenstown Hotel."

Raffles Queenstown Ltd, which owns the Novotel Queenstown (previously called the Holiday Inn), was purchased for "approximately A$19.17 million" from BLE Capital Ltd and Raffles South Island Ltd. See our commentary on the January 1997 decision for more detail.

Land for forestry

  • In a retrospective approval, Mr Lars Valter Pearson and Mrs Ivy Pearson, Swedish nationals resident in Singapore, have approval to acquire eight hectares of land in Tamure Place, Ruakaka, Northland from the Whangarei District Council for stud farming, for $155,000.

"In October 1996 North Star Racing Limited (a joint venture between the applicants and a New Zealander) was granted consent to acquire the land for the purpose of establishing a racehorse breeding, training and grazing operation on the property. It was subsequently determined that the applicants acquire the property in their own right. The retrospective consent regularises the position."

  • Ms Carey Lovelace of the U.S.A. has approval to acquire 11 hectares of land at Cames Road, Mangawhai, Northland for $155,000 for forestry planting using local forestry managers. The vendors had intended to build a house on the property.
  • The Dhammakaya International Society of New Zealand, formed in September 1996 by the Dhammakaya Foundation of Thailand, has approval to acquire a further 106 hectares of land at Oneriri Road, Kaiwaka, Northland for $1,000,000 for forestry planting. The society is a "non-profit religious, educational and charitable organisation" and the land adjoins 424 hectares "on which the Society is to establish a religious retreat and beef/sheep farming operation before 25 February 1999, and to operate/manage the properties collectively as one economic unit." In February 1997 we reported the purchase of the original land by Thai Buddhists with "business acumen": the society gained approval to acquire

"424 hectares of land at Parekura Road, Oneriri, RD 2, Kaiwaka, north of Wellsford, Northland for $2,250,000. The land adjoins the foreshore and ‘the Society proposes to establish a forestry operation on 80% of the property while the remainder will be used for cattle grazing and the establishment of a religious retreat.’ Not just your average Thai monks though: ‘The Commission is further advised that the Trustees have business experience and acumen and that this is evidenced by the manner in which The Dhammakaya Foundation’s existing worldwide investments are carried out and managed.’"

  • Unidentified "individuals who may be ‘overseas persons’" have approval to enter an unusual arrangement for the purchase of 1,595 hectares on the Ruakaka Station, Wairoa, Gisborne for US$14,990,000. The property is being sold by Golden Pine Ltd, owned by Royden Russell Mottram, a New Zealand citizen, and Amy Liu, a permanent resident. Each purchaser will acquire a 1/1499th share (as tenants in common) over the land and the same share of a forestry right over the land. The proceeds will be used for forestry development. "The proposal can be viewed as a type of joint venture arrangement with the overseas parties providing the necessary capital and the New Zealand parties providing the expertise and business skills." It is being organised by the ubiquitous Deborah Miller of Brookfields, Auckland who specialises in schemes for selling forestry land to multiple owners.
  • Rayonier New Zealand Ltd, a subsidiary of Rayonier Inc of the U.S.A., has approval to acquire approximately 205 hectares of land at Tokanui, Southland for $228,030 to improve access to adjoining land over which it has a Crown Forestry Licence, and to "improve and expand its existing Southland forestry resource base". Some or all of the land "is held for conservation purposes under the Conservation Act 1987".

Other rural land sales

  • Springfield Farm Ltd, owned equally by Mr Larry Allan Ladner, Thomas and Beryl Mary Browne (all of Australia) and Florence Ladner (a New Zealand citizen resident in Australia), has approval to acquire 62 hectares of land in Roto-o-rangi Road, Cambridge, Waikato, for $2,710,000. The property is a horse stud. "The applicants collectively have significant business experience within the thoroughbred industry and two of the four shareholders intend to reside permanently on the property following settlement, to undertake the day-to-day management of the business operation."
  • David Dean Smith of Oregon, U.S.A., has approval to acquire 86 hectares of land for beef farming in Taihape for $375,000.

"… the property is currently run as an sheep/cattle farming unit running approximately 850 stock units. The property has been marketed for a period of over a year. Mr Smith intends to acquire the property for the purpose of developing the property as an economic cattle farming unit capable of carrying at least 900 stock units. Mr Smith has extensive knowledge and expertise of the Simmental pedigree, Arubrc Stud and Brahman Cross cattle breeds which are extensively utilised throughout the US. He intends to develop these breeds, through the utilisation of the property in New Zealand. Mr Smith advises that he intends to employ a farm manager responsible for the day-to-day management/operation of the property. Mr Smith intends injecting approximately US$100,000 in development capital to be utilised in improving the property’s pasture quality."

  • Corbans Wines Ltd, a subsidiary of the DB Group Ltd of Singapore, has approval to acquire 78 hectares of land on Whitmore Road, Gisborne from the Wolter Family Trust for $4,311,000 "to secure a supply of grapes for its wine business" and expand its markets. Additional capital for developmental purposes is promised. DB Group is "approximately" 58.39% owned by Asia Pacific Breweries Ltd of Singapore which in turn is owned 80% by Heineken NV of the Netherlands and Fraser, Neave Ltd of Singapore.
  • Mr Terry Peabody of Australia has approval to acquire 148 hectares of land on Mere Road and State Highway 50, Hawkes Bay, from Milburn New Zealand Ltd, 73% owned in Switzerland. He plans to develop viticultural on it and is negotiating with the Villa Maria winery. He anticipates "that at least one block of 40 hectares may ultimately be onsold to that company". They "would then co-operatively develop the land".
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