Landcorp denies Crafar farm sale meddling

ANDREA FOX
Last updated 14:53 18/10/2012

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Landcorp chief executive Chris Kelly says he's getting fed up with suggestions that, as intended Crafar farms manager for Chinese purchaser Shanghai Pengxin, he is frustrating iwi efforts to buy two of the central North Island farms.

The state-owned enterprise boss said he had heard the rumours and they were "simply not correct".

However he said that as the two farms at Benneydale constituted a significant 25 per cent of the whole 16 farm Crafar estate package, personally, he would be asking Landcorp's future Chinese partner to consider why it would want to sell them.

After 18 months of legal challenges, Shanghai Pengxin, the Crafar farms receivers' preferred bidder, now appears poised to settle the purchase deal before December, after an 11th hour court challenge by two central North Island Maori land trusts was thrown out by the Supreme Court this week.

Tiroa E and Te Hape B Trusts chairman Hardie Peni today said there was now "no disputing" that the Chinese were clear to buy the dairy farming estate, but iwi were hopeful that a heads of agreement they had presented to Pengxin two weeks ago to buy the two farms was still on the table, despite the trusts' court defeat.

"We sent to China a heads of agreement and I understand they were agreeable, prior to us being informed that our case was not going to be heard (by the court)," Peni told Fairfax.

"We heard our heads of agreement did meet the objectives and requirements (of Pengxin) and that they were sympathetic but whether or not they honour this since the change in their favour we don't know."

Kelly knew about the heads of agreement and said it was not signed by Pengxin.

"I understand they have been in discussions but don't know where they are at. I think the latest determination by the court will probably change that, though I may stand to be corrected."

Kelly said it was not Landcorp's place to comment on any deal between iwi and Pengxin.

"Our position is we are going to take over managing the farms once the thing has been completed. We are party to a yet-to-be formed joint venture in which we will advise Shanghai Pengxin on the greater dairy interest in New Zealand, which may or may not include selling some of the farms."

But Kelly said if he was asked his opinion on selling the two Benneydale farms, the first question he would ask of Pengxin was "Why sell them anyway?"

He said Landcorp had not been asked by Pengxin "to do anything particular with those farms, to sell them or get involved".

"Other than some weeks ago when Shanghai Pengxin asked Landcorp to negotiate with iwi. I had a meeting with Hardie Peni...and said I was not in a position to personally to progress anything as we don't own the farms. My strong recommendation to him was to go away and wait until the court decision."

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Asked if Landcorp would be in a position to influence the buying and selling of the Crafar farms after the deal is settled with the Chinese, Kelly said "absolutely not".

"We will simply be a joint venture partner (with Pengxin) in a company with an independent chairman. Both parties will be able to make recommendations to that company.

"So Landcorp could say 'we recommend selling or not' but that (decision) would be up to that company.

"Frankly it's getting to me a little (suggestion Landcorp is influencing Pengxin decision) and I wish people would stop saying it. It's not correct."

Kelly said he understood Pengxin would have 30 working days now to settle the purchase with receivers KordaMentha, believed to be for around $210 million.

The Crafar farms, once the single biggest family farming entity in the country, have been in receivership for nearly three years.

- BusinessDay.co.nz

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