16 June 2021
Businessman Seung Heun Lee has been ordered to pay $1,246,625 in penalties and $30,000 in legal costs for buying several Northland properties without applying for overseas investment consent.
In the Wellington High Court, Justice Muir found Mr Lee and companies Double Pine Investment Limited and Mediation Tour Limited did not follow the Overseas Investment Act rules. Double Pine Investment Limited and Meditation Tour Limited were incorporated in New Zealand as vehicles to invest in property and manage Mr Lee’s business interests.
The size of the financial penalty reflects the significant value of the land - including its heritage value, and market valuation gains made on two of the properties.
Between 2014 and 2016, Mr Lee bought seven properties in the Northland region for $10.4 million to use for a meditation tourism business. Mr Lee is now a New Zealand resident, but was not at the time the properties were purchased.
Mr Lee said English was his second language which meant he did not fully understand the sale documents he signed, and he did not know he needed consent under the Overseas Investment Act. Mr Lee cooperated with the Overseas Investment Office throughout the investigation.
Justice Muir said in his judgment “there was substantial land area involved, the properties were of natural significance, they had a substantial combined purchase price and were being acquired for commercial tourism purposes, all obvious ’red flags’ for any professional organisation representing Mr Lee’s interests”.
Overseas Investment Office Group Manager Anna Wilson-Farrell said this is another example of the consequences overseas investors face for not seeking specialist advice before investing in New Zealand.
“It is a privilege to invest in New Zealand, and overseas investors will continue to be held to account if they do not comply with the rules.
“Anyone who is not ordinarily resident in New Zealand should seek expert advice before considering an investment here,“ she said.
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