The controversial sale of the 16 Crafar Farms to Pengxin NZ Farm Group Ltd, a subsidiary of Shanghai Pengxin Group Co Ltd (“Shanghai Pengxin”) directed by billionaire Zhaobai Jang, was approved by two NZ government ministers on 26 January 2012 following a recommendation by the Overseas Investment Office (“OIO”). In considering whether or not to grant consent to the Hong Kong registered applicant, Milk New Zealand Holding Limited (“Milk NZ”), the OIO decision dated 19 January 2012 identified “the relevant overseas persons” to be Milk NZ, Shanghai Pengxin, Nangtong Yingxin Investment Co., Ltd (“Nantong”) and Mr Jiang Zhaobai. Nantong, owned by Zhaobai Jang (99%) and his brother Lei Jiang (1%), owns Shanghai Pengxin.
See Company “Ownership diagram”, Overseas Investment Decision 22/01/14, Page 71 (Appendix 6)
Shanghai Pengxin owns 55% of Hunan Da Kang Pasture Farming C0. Ltd (“Da Kang”), which according the Da Kang June 2014 Report, is currently raising money from investors with the intention of purchasing Milk New Zealand Holding Ltd from Shanghai Pengxin
Once the purchase is completed, Shanghai Peng, as 55% owner of Da Kang, will retain only 55% ownership of Milk NZ. Consequently Nantong and its subsidiary Shanghai Pengxin will only retain 55% ownership of the NZ Crafer farms and the Lochinver Station (if its purchase by Pure 100 Land Ltd, a subsidiary of Milk NZ is approved). The remaining 45% ownership of the NZ farms and other assets held by Milk NZ [Hong Kong] and its subsidiaries, will be owned by Da Kang’s remaining shareholders.
The control of the 16 Crafer Farms and Lochinver Station will be in the control of Nantong as its subsidiary, Shanghai Pengxin will retain the majority (55%) shareholding in Da Kang, and thereby 55% of its subsidiaries and assets.
Chinese investors in Da Kang who contribute to its 45% holding in Milk NZ will effectively ‘own’ a slice of New Zealand.
Pure 100 Farm Limited, directed by Shanghai-based billionaire Zhaobai Jiang, is the New Zealand registered company that has purchased the 3,843 hectare Lochinver Station on the Napier-Taupo Highway which has a registered valuation of $70 million. The company is wholly-owned by the NZ registered company Milk New Zealand Holding Ltd which is wholly owned by Milk New Zealand Investment Ltd. The latter company was incorporated and registered in the tax-haven – British Virgin Islands (BVI) according to the June 2014 DaKang Company Report. The NZ Companies Office website provides no hint that this investment company is an overseas company and only provides a NZ address for it: “Suite 1, 139 Vincent Street, Auckland Central, Auckland, 1010, New Zealand“.
The director(s) of a company like Milk NZ (Hong Kong) incorporating a subsidiary of that company in New Zealand, is required by law to identify the principal place of business of all the shareholders of the subsidiary that constitute body corporates (i.e.state on the application form the registered office of the shareholder(s)). Milk New Zealand Investment Ltd (BVI) is a body corporate. It is the sole shareholder of Milk New Zealand Holding Ltd, incorporated in NZ on 26 June 2012. The Auckland address provided for this BVI registered shareholder must be its principal place of business (its registered office). It is given as Suite 1, 139 Vincent Street, Auckland Central, Auckland, 1010, New Zealand“. The country in which the company was incorporated is not provided on the application form signed by Mr Jhaobai Jiang.
See: Application Form: Incorporation of Milk New Zealand Holding Ltd [NZ subsidiary]
Media References to Da Kang June Report