Chinese company fined twice for ‘mistake’ not seeking Overseas Investment Office consent

The Overseas Investment Office has fined a Chinese business twice for not seeking approval before buying New Zealand properties for $7.4 million.

The office said retrospective penalties were imposed on a company that had already bought the properties without clearance, in contravention of the Overseas Investment Act.

That law demands all foreigners get approval before buying residential, lifestyle, sensitive land or spend over $100m on New Zealand assets.

The office said the Chinese business said it was “a mistake” to buy twice without getting clearance and once a director and shareholder found out about the law, she contacted the office, was granted consent and copped the penalties.

Guangjuan (Judy) Deng is a New Zealander but her company Apex One is majority-owned by Chinese interests. Its 70 per cent shareholder Wei Shen is Chinese. It was that company that bought the Auckland land, the decision said.

Apex One bought:

• A 3342sq m property at 36a Eaglehurst Rd, Ellerslie from Kiwis Amanda and Gary Vettoretti. Deng’s business plans to build 20 new dwellings there as well as five small commercial units;

• A 813sq m property at 37 Emira Ave, Point England, Auckland for $1.3m from Emira Ave Development. Deng’s business plans to demolish the existing dwelling and build seven new residences.

“A retrospective consent was required because the applicant is an overseas person under the act as 70 per cent of its shares are owned by an overseas person,” the office said.

Deng, who is a New Zealander and a director and shareholder of the applicant, entered into the sale and purchase agreement for the land with an intention to nominate Apex One as the buyer without making the agreement conditional on consent under the act.

But it was a mistake.

“The applicant satisfied the Overseas Investment Office that the breach was inadvertent. Ms Deng did not realise that, as a New Zealander, she was required to seek OIO consent for the purchase through a company which is an overseas person,” the office said.

“As soon as receiving legal advice that OIO consent was required, Ms Deng promptly contacted the OIO to remedy the situation,” it said.

Consent for the Ellerslie purchase was granted on February 3 but the decision was only released yesterday.

Deng also postponed settlement until getting a decision on her consent application for the second purchase “that arose from a similar mistake” and has paid an administrative penalty imposed under the act, the office said.

That second case was the Point England property and consent was granted last November.

In other decisions released yesterday, a vineyard deal was approved.

Cloudy Bay Vineyards got consent to buy 11.7ha of sensitive Marlborough land at 128 Bedford Rd, Renwick. Cloudy Bay is 66 per cent owned by LVMH Moёt Hennessy Louis Vuitton SA, France and 34 per cent by Britain’s Diageo Plc.

The land adjoins an existing vineyard planted in chardonnay and sauvignon blanc and the additional land will also be planted in vines.

Tasman Tourism New Zealand, 90 per cent owned by United Arab Emirates interests, got consent to buy 1.5ha of sensitive land at 128 Te Anau Tce, Te Anau for a sum kept secret. A new holiday park will be developed on the land over a five-year period.

Evolution Rehab, owned by overseas investments funds managed by Pacific Equity Partners of Australia, got consent to buy sensitive Auckland and Gisborne land from Bupa Care Services NZ.

Source: Read Full Article