Enforcement action taken

Find out about the enforcement action taken by the Overseas Investment Office since 2015

Overseas investors must get consent when the Overseas Investment Rules require them to and meet the commitments they made when they applied for consent.

We will usually publish the outcome of any enforcement action we take, unless there is good reason to withhold information. On this page we set out information about enforcement action we have taken since 2015.

We carry out our enforcement function through a range of activities, including monitoring compliance with conditions, investigating possible breaches and taking appropriate enforcement action where we find the Rules have been broken.

Learn about how the overseas investment rules might apply to you

Read more about our enforcement criteria

Read the full informationabout the enforcement powers and tools available to us

Court orders

Current proceedings

We currently have two proceedings before the High Court where the Office is seeking disposal and civil penalty orders for purchases of sensitive land without consent.  As these matters are currently before the courts, it is not appropriate for us to provide further information at this time.   

Decided cases

Penalties or disposal orders have been made in the following cases:

Name / entity

Date

Details

BCH Investments
Ltd
12 July 2019

The High Court ordered BCH Investments Ltd  to divest its interests in two properties, and pay:

  • a civil penalty of $300,000
  • account taker’s costs of $260,282.68 
  • legal costs of $27,763.50

for failing to obtain consent under the Overseas Investment Act 2005.

The sale of the properties must occur within 2 years, with leave reserved to Land Information New Zealand to seek further orders under s47 of the Act if the divestment has not occurred within that time.

View a copy of the judgment (PDF 49KB)

Zhongliang Hong, Xueli Ke, IRL Investment Limited, Grand Energetic Company Limited4 July 2019

The High Court ordered the defendants to pay a total of $2,375,256 in civil penalties and costs for failing to obtain consent under the Overseas Investment Act 2005 for the purchase of two Auckland properties.

Zhongliang Hong and Xuelie Ke were each ordered to pay a penalty of $307,500 and $10,000 to the Overseas Investment Office as a contribution to its costs.

IRL Investment Limited was ordered to pay $2,335,256 in gains from the sale of one property.

Grand Energetic Company Limited was ordered to sell the other property.

Oral judgment delivered 4 July 2019. Written judgment to follow.
Read the settlement agreement (PDF 2MB)

Agria (Singapore) PTE Ltd (part of

Agria Corporation) and Mr Alan Lai

21 March 2019

The High Court imposed civil penalties for breach of good character conditions that attached to conditions of Agria's consent to invest in PGG Wrightson, namely:

  • Agria $100,000 in civil penalties
  • Mr Lai $120,00 in civil penalties 

Agria and Mr Lai were ordered to pay $30,000 to the Overseas Investment Office as a contribution to its costs. 

Note that the High Court decision followed a settlement entered into between the parties – refer to extract in “Settlement” section below.
Read the judgment (PDF 103KB)
Read the news item

Wenbing Tang
Xianghua Huang, Binghan Zhou
Binzhi Ouyang

12 March 2018

The High Court ordered the defendants pay a total of $847,000 in civil penalties and costs for failing to get consent under the Overseas Investment Office before buying a property.
Wenbing Tang was penalised $110,000
The other three defendants received a penalty based on the gain they otherwise stood to make from disposing of the property.
Read the judgment
Read the news item

Carbon Conscious New Zealand Limited

Filed – 2015
Judgment – 4 April 2016

Carbon Conscious was ordered by the High Court to pay a civil penalty after using an associate to purchase sensitive land on its behalf.
Read the judgment (PDF 121KB)
Read the news item

 

Disposal of property

Name / entity

Date of disposal

Details

Kingstown Blue Spring Resort Limited (formerly Kingstown Volcano Springs Limited)Forthcoming

In July 2014, KBSR was granted consent to acquire the Okoroire Hot Springs Hotel on 27 hectares of sensitive land at 18 Somerville Road, Okoroire. KBSR’s consent conditions required it to implement the developments described in its Business Plan by 17 August 2018. KBSR did not do so and the OIO has now required it to dispose of the property in accordance with a disposal framework set out in its consent conditions. Further details will be released when appropriate.
Read the news item

Michael Rems and Julie O’Shea20 December 2018Rems and O’Shea (American investors) were granted consent in 2015 to acquire approximately 0.5 hectares of sensitive land on Waiheke Island. Consent conditions required the couple to become ordinarily resident in New Zealand within three years. They did not do so and consequently we required them to dispose of the property – which they have now done.

Overseas Investors (names withheld pending sale)

Forthcoming

Properties in the Twizel area are currently for sale. Overseas investors acquired 326.993 hectares of sensitive land without consent. A settlement agreement has been entered into. Further details will be released when they become available.

Flying Class Limited

20 September 2018

Flying Class Ltd acquired approximately 5.7728 hectares of sensitive land near Matamata (a horse stabling facility). Consent conditions required it to complete certain development works. However, it did not complete all of those works and was required to dispose of the property. Flying Class has now disposed of the property.     

Tui Estate Limited

Forthcoming

Property is currently for sale.
Overseas investors acquired approximately 67.9481 hectares of land in Rakaia Gorge, Canterbury. Consent conditions required the consent holder to develop homes on the land. The consent holder has not done this, and the land is therefore to be sold.

Waiheke Island Airpark Resort Limited

5 December 2018

Conditions of consent required the consent holder to develop Waiheke Island airfield (8.9580 hectares) and to dispose of the airfield if it was not developed.
As the property had not been developed, the consent holder has disposed of the property.

Canres Limited

Forthcoming

Conditions of consent required the consent holder to develop a recreational and sport lodge business on the property (40 hectares) and to dispose of the property if it was not developed.
As the conditions have not been met, the property is currently for sale.

MTS Energy Limited

27 July 2018

Overseas investors acquired approximately 0.5 hectares of land in Northcote, Auckland without OIO consent.
OIO consent was required because the land is sensitive land (greater than 0.4 hectares and adjoins a recreation reserve).
The OIO entered into a settlement agreement with the overseas investors on 9 November 2017 for the land to be sold.
The property has been disposed of.

Sino-NZ Tourism Development Limited

July 2018

Overseas investors acquired over 5 hectares of land near to Flatbush, Auckland without consent. OIO consent was required because the land is sensitive as it is over 5 hectares in a non-urban area. The consent holder has disposed of the property.

Terrior Winery Fund

2017

Mr Charles Banks, the majority shareholder of Terrior Capital LLC, which manages Terrior Winery Fund, has been sentenced to four years imprisonment for fraud in the United States.
Conditions of consent require the 'individuals with control' of the Terrior Winery Fund to remain of good character. In light of Mr Banks' conviction and sentence, we consider that Mr Banks is not of good character.
Mr Banks has resigned as director of Trinity Hill Limited and is being removed from having any interest in Terrior's New Zealand investments.

Whisper Creek Golf Resort Limited (previously Christchurch Golf Resort Limited)

Aug-17
Oct-17

Conditions of consent required the consent holder to develop a golf resort but it has not done this. The consent holder has disposed of the property.

Silver Fern International Travel & Trade Limited

Oct-16
Feb-17

Conditions of consent required Silver Fern to develop an accommodation business on the property and to dispose of the property if it did not.
The consent holder did not meet the conditions of consent and was required to sell the property.

Nirvana Capital Limited

Apr-16

Conditions of consent required two of the shareholders of Nirvana Capital Limited to become ordinarily resident in New Zealand and to dispose of the property if they did not.
Due to failure to meet the conditions of consent, the consent holder sold the property.

Mikhail Khimich

Dec-15

Conditions of consent required Mr Khimich to develop an organic winery on the property and to dispose of the property if the winery was not developed.

Settlement

Name / entity

Date

Details

Agria (Singapore) PTE Ltd (part of

Agria Corporation) and Mr Alan Lai

December 2018 

Agria and Mr Lai agreed that:

  • the fact of the United States Securities and Exchange Commission (SEC) investigations and settlements are matters that reflect adversely on the fitness of Mr Lai in relation to Agria’s investment in PGG Wrightson
  • consequently Mr Lai and Agria failed to meet the conditions of consent to invest in PGG Wrightson.

As a result Agria and Mr Lai agreed to:

  • recommend to the High Court that civil penalties should be imposed
  • Agria Singapore is to reduce its shareholding from 50.22% in PGG Wrightson to below 50%
  • Mr Lai to be prevented from being Chair or director of PGG Wrightson for 5 years
  • use best endeavours to ensure Joo Hai Lee resign as a Chairperson of PGG Wrightson by mid-2019
  • contribution of $30,000 to OIO costs.
Read a copy of the settlement agreement (PDF 15MB).
 
Forest Growth Holdings Ltd (FGHL)July 2018

The settlement related to FGHL’s role in the transaction described in the New Forest entry below. 
Read a copy of the settlement agreement (PDF 2MB)
Read the warning issued to FGHL in the Warnings section below

New Forests Asset Management Pty Limited (New Forests) and

Wairarapa Estate Limited (WEL)
October 2016

The settlement relates to an arrangement between New Forests (through WEL, a company managed by New Forests) and Forest Growth Holdings Limited (FGHL), whereby FGHL – a New Zealand company – would purchase small blocks of forestry land to amalgamate and then on-sell to New Forests – an overseas company.  In entering into this arrangement, FGHL was effectively acting as New Forests’ associate.
The transactions involved forestry land in the Wairarapa and took place in accordance with a term sheet the parties had agreed to.
The arrangement meant that New Forests could buy the amalgamated land from FGHL at an expected price and seek consent later once it had the certainty of being able to buy from FGHL and for fewer transactions than it would otherwise have needed to apply for.
The parties entered into the arrangement on the basis of legal advice and in the belief they were complying with the overseas investment rules.
Read a copy of the settlement agreement (PDF 2MB)
Read a copy of the warning issued to the parties in the Warning section below

Udo Lammerting
Dr Kristin Lammerting
LIG Lammerting Investment Group (NZ) Limited]

April 2018

Settlement related to the acquisition of several properties in the Northland region which were investigated by the OIO.
Details of the settlement agreement will be released once key steps under the agreement have been undertaken.

Andrew Turney
Paul Turney
Wendy Turney
Schooner Agribusiness LLC

May 2015

Settlement related to two of six farming established by the late Alan Hubbard that were investigated by the OIO and resulted in the disposal of sensitive land acquired without consent. The other four syndicates had disbanded by this date and the properties had already been sold.
The overseas investors in the two syndicates paid $150,400 to charity and OIO’s costs.
Read the news item

Administrative penalties

Penalties for retrospective consents

The OIO can grant consent for an investment retrospectively where an investor inadvertently break the rules. The OIO has provided guidance outlining when a retrospective consent may be appropriate and the factors we take into account in setting the administrative penalty for a retrospective consents.

Read the OIO guidance on retrospective consents

From 1 July 2017 any penalties imposed for retrospective consents is included on the decision summary issued when consent is granted.

Penalties for late provision of information

Prompt and accurate provision of information is key to our ability to detect and take action on breaches of the rules and to effectively monitor whether investors have met conditions imposed on consents.

We impose penalties for the late provision for information or documentation.

In 2017 we issued 4 penalties for late reporting.

In 2018 we issued 3 penalties for late reporting.

In 2019 we issued 7 penalties for late reporting.

Names of repeat non-compliers may be published.

Warnings

The following warnings have been issued by the Overseas Investment Office since 2015:

Name

Date

Details

Min Jia13 September 2018Warning for acquiring an interest in shares in companies which own sensitive land without consent in 2014 and 2015.
Read the warning (PDF 191KB)
New Forests Asset Management Pty Limited (New Forests), Wairarapa Estate Limited (WEL) and Forest Growth Holdings Ltd (FGHL)13 July 2018Warning around acquiring sensitive land without prior consent by using a New Zealand associate to allow amalgamation of land and delay the need for consent.
Read the warning (New Forests, WEL and FGHL) (PDF 832KB) 

Itoham Yonekyu Holdings Inc

28 July 2017

A warning for obtaining an interest in sensitive assets, on 1 April 2016, without consent.
Read the warning (PDF 1MB)

Southern Paprika Limited

15 December 2016

Warning for acquiring sensitive land without consent in 2005
Read the warning (PDF 131KB)

Harbour Edge Avocados Limited and Southern Paprika Limited

15 December 2016

Warning for acquiring sensitive land without consent in 2015. (The matter was also subject to a retrospective application for consent.)
Read the warning (HEAL) (PDF 122KB)
Read the warning (SPL) (PDF 131KB)

Rafael and Federico Grozovsky
Ceol and Muir Inc

28 September 2016

Warning that information provided to the OIO must be complete and accurate and no material omissions should exist in relation to good character checks.
Read the warning (Rafael and Federico Grozovsky) (PDF 194KB)
Read the warning (Ceol and Muir Inc) (PDF 185KB)

I-Lun Chien

12 December 2015

Warning in relation to a false statement made to the OIO.
Read the warning (PDF 118KB)

Contact Energy Limited

8 June 2015

Warning in relation to acquisition of an interest in two relatively small areas of sensitive land without consent in 2011 and 2014.  The land was no longer owned by Contact Energy.
Read the warning (PDF 297KB)

Russell Mawhinney

8 September 2017

Warning in relation to incorrect legal advice given to overseas persons.
Read the warning (PDF 182KB)
Read the OIO's report (PDF 397KB)

Referral complaint to professional society

We can refer a person to a professional conduct body in relation to a breach of the Overseas Investment Rules.

Name / entity

Date of referral and to which professional society

Details

In relation to Carbon Conscious New Zealand Limited

December 2017 – New Zealand Law Society

Carbon Conscious New Zealand Limited obtained legal advice on the conduct of its business in New Zealand, including the acquisition of land.
On the basis of that, Carbon Conscious New Zealand Limited breached the Overseas Investment Act 2005 which resulted in it paying a penalty.

Compliance Action

While it will often not be appropriate for us to comment on matters we are investigating, we may release information in relation to compliance action we are in the process of taking.

In December 2018 we issued a cease and desist notification to require misleading advertising about exemptions under the Overseas Investment rules to be removed. The advertising material was removed immediately.

Compliance Letters

To help encourage better compliance in the future, we issue letters, to individuals or organisations explaining how the Overseas Investment Rules need to be met and how they apply to them. Often these letters will clarify the application of the rules to particular situations or to remind people of particular compliance requirements.

Compliance letters issued:

Year

Compliance letters issued

2016

3

2017

19

2018

25

201919

 

Last Updated: 30 August 2019