Hefty fine for companies which failed to seek OIO approval

Monday, 16 December 2019

The companies bought land next to a reserve for residential development but failed to let the OIO know.

Two property development companies have been fined $123,000 for failing to get government consent on the purchase of a Birkenhead property.

In the High Court in Auckland, FFG Investments Ltd and Grant Sky Ltd have been ordered to pay the penalty and $10,000 in court costs. Both companies have the same three shareholders.

The Government is introducing new powers which it says will protect New Zealanders' interests in important assets such as ports and airports, telecommunications and electricity infrastructure.(First published in November 2019)

Vanessa Horne, group manager of the Overseas Investment Office (OIO), said the companies both acquired an interest in the property without first getting consent from the office because they were overseas investors buying sensitive land.

'It's important that overseas investors, particularly those intending to undertake residential developments, fully comply with the Overseas Investment Act,' Horne said.

* Consent denied: Why did Sage block OceanaGold's OIO application?**

'When we discover anyone who has broken the rules, we take appropriate enforcement action.'

FFG purchased the 2.87 hectare property at Birkenhead in Auckland in October 2013. Two years later, FFG sold the property to Grand Sky. The two companies planned to carry out a residential development at the property.

At the time of the deals, their shareholders were considered overseas people under the Act. However, by the time title was transferred to Grand Sky, it was no longer considered an overseas person under OIO rules.

The land was considered sensitive because it adjoined a reserve.

Horne said the OIO took its role seriously and would continue to pursue cases where people had bought land illegally.