4 August 2015

Overseas Investment Office penalises investors

Investigation and enforcement action by the Overseas Investment Office (OIO) has resulted in two south Canterbury farming syndicates being penalised $173,400 for breaches of the Overseas Investment Act.

Both syndicates involve UK investors Andrew and Paul Turney, while one also involves US company Schooner Agribusiness LLC. The farming syndicates are two of six established by the late Alan Hubbard that were investigated by the OIO. The other four syndicates have disbanded and sold their properties.

OIO Manager Annelies McClure said the six syndicates, or their investors, had breached the Overseas Investment Act 2005 and Overseas Investment Act 1973 multiple times since 2001.

“The syndicates breached the Acts by acquiring sensitive land without consent, and the investors breached the Act by investing in the syndicates without consent.”

The investigation found the breaches to be due to the overseas investors’ reliance on advisors in New Zealand to take care of the necessary legal work.

“Alan Hubbard established the syndicates, and a variety of legal advisors were involved in the transactions. From the limited records available it appears that the advisors overlooked the requirements of the 1973 and 2005 Acts.

“Until the breaches were discovered in 2013, the investors were unaware that breaches had occurred. The investors and syndicates admitted the breaches and have cooperated with our investigation.”

The two syndicates have collectively paid $150,400 in penalties to charity: $93,400 to the Advance Ashburton Community Foundation; $43,000 to the Nuffield Farming Scholarship Trust; $5,000 to the Canterbury West Coast Air Rescue Trust; $5,000 to the Timpson Peel Forest Community Trust; and $4,000 to Order of St Johns (Ambulance Service) at Geraldine.

The syndicates have also paid $23,000 (incl GST) to cover the OIO’s investigation costs.

“We believe that this is a very good outcome, as contested court proceedings would have meant further uncertainty and delay in penalising the breaches. Moreover, the length of time since the transactions occurred means that many of the breaches would have been time-barred if the matter had gone to court.”

“One of the two remaining syndicates has obtained consent from the OIO to keep its property, and the second has recently applied for consent to keep its property. If consent is declined, the syndicate will be required to sell the property,” Ms McClure said.

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