22 Oct 2010

SFO probes transactions involving Crafar farms

12:13 pm on 22 October 2010

A fraud investigation has begun into transactions involving a Hong Kong company trying to buy Crafar farms in New Zealand.

The Serious Fraud Office says it is acting on information from the Overseas Investment Office and investigating transactions between Hong Kong-based Natural Dairy (NZ) Holdings and the UBNZ Group.

The companies want to buy the farms, which are in receivership, and have applied to the Overseas Investment Office for approval.

SFO chief executive Adam Feeley says it has received information from the Overseas Investment Office, as well as material from other sources, and believes an investigation may disclose serious or complex fraud.

Mr Feeley says the transactions in question are the proposed sale and purchase of a number of the Crafar dairy farms.

The SFO says it is conscious of the possible impact of its actions, and for this reason the initial investigation will be carried out in weeks rather than months.

Natural Dairy (NZ) Holdings says it is confident the SFO will find no wrongdoing between the companies trying to buy the farms.

UBNZ director May Wang says she is disappointed and surprised at the way the investigation was announced without the company being able to discuss it with the Overseas Investment Office or the Serious Fraud Office.

The company's vice president, Graham Chin, says he's confident investigators will find no irregularities in its New Zealand business dealings.

No sale decision until investigation complete

The Overseas Investment Office says it won't be able to provide a recommendation to the relevant ministers on whether the sale to the companies should go ahead until the SFO inquiry is completed.

The office says it will continue its own investigation into the purchase of the four farms by UBNZ Assets Holdings Limited in February 2010 and will continue to co-operate with the fraud investigation as required.