Milk New Zealand Investments Ltd, a company registered in the tax-haven – British Virgin Islands – is inextricably connected to Chinese billionaire Zhaobai Jiang’s Hong Kong registered company Milk New Zealand Holding Ltd (“Milk NZ”), which has purchased the $200 m Crafer farms and $70.6 m Lochinver Station through its NZ incorporated subsidiaries. Milk New Zealand Investments Ltd (BVI), with Jiang as sole director, is owned by Milk NZ which in turn is owned by Shanghai Pengxin Group Co. Ltd (“Shanghai Pengxin”). The latter is owned by Nantong Investment Company Ltd, of which Jhaobai Jiang owns 99% of its shares.
1. See: www.cninfo.com.cn/finalpage/2014-06-18/64148310.PDF
2. See Company “Ownership diagram”, Overseas Investment Decision 22/01/14, Page 71 (Appendix 6)
Milk NZ [Hong Kong] entered into a sale and purchase agreement with the vendor of the Crafar farms on 19 November 2011. Milk NZ then applied to the NZ Overseas Investment Office (OIO), as it was required to do under the Overseas Investment Act 2005, seeking approval of the purchase on 12 April 2011. The OIO issued its decision dated 19 January 2012 recommending that the sale be approved by the government. On 26 January 2012 the deal was approved by two Ministers of the Crown. Following subsequent protracted litigation including a High Court challenge initiated by another bidder, the Crafar farms Pengxin NZ Farm Company Ltd, a subsidiary of Milk NZ, became the owner of the 16 Crafer farms.
Few New Zealanders would have suspected that Shanghai Pengxin, through its Honk Kong registered subsidiary, Milk NZ, for the purpose of purchasing Crafar farms, set up a NZ registered subsidiary – Milk NZ – which would be owned by the British Virgin Islands (“BIV”) registered company Milk New Zealand Investments Ltd (a subsidiary of Milk NZ [Hong Kong])
The OIO decision dated 19 January 2012 had approved the sale of the Crafer farms to the Hong Kong registered Milk NZ, on the condition that:
“The Applicant [Milk NZ/Hong Kong] will register as an overseas company under the NZ Companies Act 1993 prior to acquiring the [Crafer farms] investment.” The company did this, incorporating a NZ registered subsidiary on 26 June 2012.
See point 4 on page 4:
There are three ways an overseas company like Milk NZ (Hong Kong) could be registered in New Zealand. One is to set up a subsidiary as defined in S. 5 of the Companies Act 1993.
The application and registration must conform to ss. 336-337 of the Act
Milk New Zealand Investment Ltd, a British Virgin Island registered company, wholly owned by Milk NZ [Hong Kong], is the sole shareholder of Milk NZ [NZ] – the subsidiary of the Hong Kong based ‘parent’.
The term “subsidiary is defined in S. 5(1)(b) of the Act.
Pure 100 Farm Limited, was set up by Zhaobai Jiang, as a subsidiary of Milk NZ to purchase the 3,843 hectare Lochinver Station near Taupo which has a registered valuation of $70 million. Pengxin New Zealand Farm Group Ltd was set up as a subsidiary of Milk NZ to purchase the Crafer farms.
The link to the British Virgin Islands company was determined from our analysis of the DaKang Report (In Chinese) for June 2014. We have also determined from the report that Milk New Zealand Investment (BVI) is wholly owned by Shanghai Pengxin Group Co Ltd which in turn is wholly owned by Nantong Yingxin Investment Co. Ltd (99% owned by Jhobai Jiang and 1% by Lei Jiang).
The Shareholder Consent document on the NZ Companies Office website, signed on behalf of Milk New Zealand Investment Ltd (BVI) by Zhaobai Jiang and dated 26 June 2012, records 100 ordinary shares in the NZ subsidiary of Milk NZ.
Both Pure 100 Farm and the NZ subsidiary of Milk NZ share the same NZ registered NZ office, Level 34, Vero Centre, 48 Shortland St, Auckland, 1010, and have as sole director Zhaobai Jiang, whose residential address is No. 57, Lane 2188, Hongqiao Road, Shanghai, China. [See: www.companies.govt.nz].
If the Lochinver sale is approved by OIO and signed off by two NZ Ministers of the Crown and Chinese authorities, it will be the second-biggest foreign acquisition of NZ land. It follows on from Shanghai-Pengxin’s highly controversial $200 million purchase in December 2012 of the 7,892.5 ha Crafar farms in the Central North Island, involving its joint venture purchase with Landcorp NZ. This was the largest foreign acquisition of New Zealand farm land by value by any foreign buyer. (Shanghai Pengxin has also recently purchased 4,471 ha of the Synlait Farms).
Stevenson Group, the owner Lochinver Station agreed to sell it to Shanghai Pengxin and ran an extensive tender process to secure the recent controversial sale.
The link to the British Virgin Islands tax haven will no doubt be of great interest to those who oppose the sale of NZ ‘mega’ farms to overseas buyers.