OIO faces 'independent review' following Onetai farm sale

Land Information Minister Louise Upston has received an apology from department boss Peter Mersi.
ROBERT KITCHIN/FAIRFAX NZ

Land Information Minister Louise Upston has received an apology from department boss Peter Mersi.

An independent review will be held into the Overseas Investment Office, in the wake of advice it provided to ministers on the 2014 sale of the Onetai Station farm in Taranaki.

Land Information Minister Louise Upston said she was "not happy" and had asked for the review. 

Peter Mersi, the chief executive of Land Information, said information was not passed on to ministers at the time the application to purchase the 1317 hectare farm was approved.

The information related to allegations that a business associated with the applicant was involved in a pollution incident in Argentina in 2012, he said. Those allegations were raised by Labour Party land information spokesman David Cunliffe last week.

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NZ First leader Winston Peters said he was unsurprised by concerns with the OIO's process, given it was "just a rubber stamp".

"It's a disgrace actually for our nation to have such a body in charge of any of its policing of the laws, and I'm not surprised that they let the political system down again," he said.

Onetai Station was sold to a Panamanian company Ceol & Muir, which the OIO told ministers was ultimately owned by Argentinian businessmen Rafael and Federico Grozovsky.

"In the Ceol & Muir case, relevant information was not passed on to government ministers," Mersi said.

"I have advised Land Information Minister Louise Upston of this situation and apologised. I have also given her an assurance there will be no repeat of this situation in future," he said.

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"The OIO has a robust process for dealing with applications but on this occasion, it does not appear to have been followed. This was a regrettable lapse," he added.

Mersi said an independent person would be appointed to conduct the review of the OIO's processes around good character "so the Government can be confident that relevant issues are being identified and passed on".

"In the case of the Onetai Station sale, if we determine that the applicants are no longer of good character or have provided misleading information, legal action will be considered," he said.

Stuff has reported that the treasurer of Ceol & Muir, Gustavo Daniel Chaves Mantaras, was also a director a British company, Chaterella Investors Limited, that Portugal believed laundered money for former Brazilian and Portuguese national soccer coach Luiz Felipe Scolari.

The tax investigation was dropped after Scolari reportedly agreed a €3 million (NZ$4.9m) financial settlement.

OIO spokesman Mike Munro said that would not form part of the review. Nor would it review the advice the OIO gave ministers that the Grozovsky brothers were the ultimate owners of Ceol & Muir, he said.

Cunliffe said the second issue should be part of the review.

"There is significant doubt, as Stuff has highlighted, about what the OIO's conclusions really were. They listed the Grozovsky brothers as the 100 per cent shareholders, but they relied in their advice on a plumbing diagram which indicated other family members were shareholders through a blind trust. They can't be right both times."    

Mersi said that after the Onetai Station sale was approved, the OIO began alerting ministers to any relevant issues found during the assessment of applications.

It had also appointed "a dedicated and experienced person to undertake all the web searches for information to inform the good character test", he said.

 - Stuff

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