Consideration of good character after consent has been granted

An overseas investor must disclose any matter that is relevant to considering good character requirements before getting consent.

All material that could adversely reflect upon a person’s fitness to hold the particular investment (including all offences and contraventions) must be disclosed.  A failure to disclose relevant information will be treated seriously as it can amount to an offence under the Overseas Investment Act.

The information here only covers the Overseas Investment Office's considerations of good character after consent has been granted.  

More information on how good character is considered as part of an application process.
 

Overseas investors are often conditioned to remain of good character when they get consent.  A breach of a good character condition may occur where someone has acted in such a way or done something which raises concerns about their character such that they are:

  • unfit to hold the asset they have consent for, or
  • likely to bring the country into disrepute. 

This is consistent with the good character test that must be satisfied to get consent and the Overseas Investment Act’s purpose that it is a privilege for overseas people to own or control sensitive assets in New Zealand.

Where we consider a breach has occurred, we may seek court orders requiring the investor to dispose of the investment and/or penalties.  As the High Court has stated, there is a strong need to deter breaches of the good character requirement given its importance in the context of the scheme of the Act.[1]

The evidential and natural justice considerations that the Overseas Investment Office will need to take into account before we can take action include considering if:

  • the allegations are of a clear and serious nature
  • the allegations are capable of being proved, such as because the person has been convicted of an offence or had another serious sanction taken against them – this will often mean we need to wait until processes in another jurisdiction are complete before we consider taking proceedings, and
  • a penalty is likely to be ordered.

When taking action, we will take into account factors such as the potential impact on others (such as New Zealand employees and other investors) of any enforcement action and consider the type of penalty we might seek.

If you think there is a matter which might be relevant to us considering your obligation to remain of good character, or that of an overseas person, we encourage you to get in touch with us to discuss the matter.  Consent conditions require investors to inform us of breaches and early co-operation is an important consideration in any enforcement action.

What we are likely to look at in considering a breach of a good character condition.

 

[1] Chief Executive of Land Information New Zealand v Agria (Singapore) PTE Limited and Lai Guanglin [2019] NZHC 514

Last Updated: 18 April 2019