The group led by Sir Michael Fay behind a New Zealand bid for Crafar farms will today raise the stakes by promising to match or better the rival Chinese bidder on a raft of promises that helped swing the Government's approval.
The move comes as Prime Minister John Key signals a law change is unlikely in response to a High Court ruling that potentially sets a high bar on future purchases by foreign investors.
Mr Key said any law change was unlikely to get the numbers in Parliament - and UnitedFuture leader Peter Dunne, on whose vote any law change is likely to hinge, confirmed yesterday his support was not guaranteed.
But the Government also appears to have little stomach anyway for a political battle over freeing up foreign investment rules in the face of loud opposition from Labour, the Greens and NZ First.
The High Court this week set aside approval for Milk NZ, a company set up by China's Shanghai Pengxin, to buy the 16 Crafar farms – and appeared to set a higher test for foreign land sales than the one that was previously believed to apply. It ordered the Overseas Investment Office to rethink the purchase under that new threshold.
The ruling followed a request for a judicial review by a farmer and iwi group led by Sir Michael Fay, which has put up a rival bid.
The ruling has sparked warnings that the uncertainty will scare off foreign investors.
The Government is waiting for Crown Law advice on whether the ruling is as sweeping as some believe, and could yet decide to appeal against the decision – despite initially rejecting that as unlikely.
That could be more palatable politically than a law change, despite the likelihood that an appeal could take years to resolve through the courts.
The High Court ruling this week said Milk NZ promised numerous non-economic benefits that no New Zealand buyers were required to offer, and Land Information Minister Maurice Williamson had sworn an affidavit that these "particularly influenced him" in granting final approval.
These conditions included offering riverbeds to the Crown, along with a historic pa site that the Office of Treaty Settlements wants to purchase, and protecting another pa site by covenant.
Milk NZ would also create or facilitate public walking access to the Te Araroa Trail and the Taharua River and an unlogged podocarp forest, and commission extensive habitat protection and riparian planting.
Other conditions agreed to by Milk NZ included scholarships and new jobs.
The Government has argued that it can't force New Zealand buyers to match those conditions because they do not have to go through an approval process.
But a source close to the New Zealand group said it would publicly commit to any conditions or covenants agreed to by Milk NZ.
The group has promised that no one buyer will own more than two of the farms and has offered to accept legally binding covenants barring it from selling the properties to foreign owners.
The receivers have refused to consider the group's bid because it is about $30 million lower than the amount offered by Shanghai Pengxin.
Senior government ministers remain suspicious of the group's motives, because of Sir Michael's ruthless business record.
- © Fairfax NZ News
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