3 Aug 2010

Local companies 'shut out' of bids for NZ assets

1:58 pm on 3 August 2010

Local fund managers say they are being shut out of bidding for New Zealand assets by rules that should be targeting foreigners.

The Overseas Investment Act says investment funds with 25% overseas cash are classified as foreign and must therefore apply to the Overseas Investment Office to buy local assets, even if the fund is owned and operated by New Zealanders.

A lawyer at Chapman Tripp, Nick Wells, says the rules are causing those selling assets to overlook offers from the funds to avoid complications.

That is leading to local business owners taking lower offers, he says, depriving the economy of capital.

Finance Minister Bill English, who is reviewing the act, says the Government is aware of the issue.