Enforcement action taken

The High Court ordered Trinity Green Estate Partnership to pay civil pecuniary penalties of $97,500. Trinity had also previously paid $15,000 towards costs incurred by LINZ.

Trinity Green acquired 8.5ha of sensitive land in Cambridge for a residential subdivision without consent under the Overseas Investment Act. Trinity Green was an ‘overseas person’ under the Act when it acquired the land because one of the two trusts making up the partnership was controlled and funded from overseas. This trust structure was adopted on advice from New Zealand-based lawyers. The breach was self-reported by Trinity Green when it engaged new lawyers to assist with the sale of part of the land and it was made aware of its breach of the Act.

The penalty included a discount of 25% for all mitigating factors, including self-reporting and cooperation.

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Trinity Green penalised $97,500 for breaching the Overseas Investment Act

The High Court ordered the defendants to pay:

• Dr Won Joo Hur
  Civil pecuniary penalties of $100,000
• Dr Jaeho Choi 
  Civil pecuniary penalties of $30,000.

The defendants used a New Zealand company in an attempt to purchase sensitive land in Helensville without consent.

This order follows criminal conviction and fines imposed on both parties in 2020 in relation to their conduct during the investigation into this sale by the Overseas Investment Office. 

The civil pecuniary penalties relate to the acquisition of sensitive land without consent and evasion of the Overseas Investment Act 2005. The matter is concluded.

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High court orders civil penalties totalling 130,000 for purchase of sensitive land without consent.

The High Court ordered the defendant to pay:

• civil pecuniary penalties of $160,000
• costs of $15,000.

The defendant Clevedon Kawakawa Road Limited (CKRL) acquired two properties which were sensitive because they are non-urban land with a combined area that exceeds 5ha. In addition one of the properties adjoined the foreshore. 

CKRL was subject to the direction, control or influence of an overseas person when it acquired the interests and was therefore an associate of an overseas person when it acquired the land. 

The circumstances required consent to be obtained from the OIO. No application was made.

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27 May 2021 (Judgment)

11 Jun 2021 (Reasons)

The High Court ordered the defendants to pay:

• civil pecuniary penalties of $1,246,625
• costs of $10,000 each.

The defendants purchased 7 Northland properties without consent. The breach was inadvertent but was considered serious because of the combined size, value of the properties (in dollar terms and in environmental value) and the commercial context of the acquisitions. The penalties include the quantifiable gain made on two of the properties.  Discounts were given for mitigating factors including co-operation.

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The High Court ordered the defendant to pay:

• a civil pecuniary penalty of $110,000
• costs of $15,000.

Ms Zhang purchased sensitive land in Auckland without OIO consent in 2015.  The land was sensitive because it adjoined the foreshore and also a Heritage New Zealand listed site.  The land was purchased before Ms Zhang’s permanent residence visa was  finalised and prior to her becoming ordinarily resident.  It was common ground that the breach was inadvertent although the Court noted that due diligence on the application of the Act is expected.  The penalty included a discount of 20% for mitigating factors including Ms Zhang’s early admission of liability and agreement to pay a penalty.

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The High Court ordered the defendant to pay:

• A civil pecuniary penalty of $49,000
• costs of $15,000.

Mr Zhou, having entered a sale and purchase agreement for sensitive land which was conditional upon OIO consent, simultaneously signed a lease agreement for 10 years with a 10 year right of renewal.  No consent was sought for the lease in breach of the Act.   The Court accepted that breaches involving leases should not generally be regarded as less serious than those involving the purchase of freehold land.

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The High Court ordered the parties to pay:

• civil penalties of $1,380,000
• costs of $16,000.

The Song family, which controlled the companies, acquired interests in five forestry blocks in breach of the Overseas Investment Act 2005.  The investors were negligent about the requirement for consent. All properties were required to be disposed of and civil pecuniary penalties included the gains from sale.

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The High Court ordered West Drury Holding Ltd (WDHL) to pay:

• civil penalties of $125,000
• costs of $15,000.

WDHL acquired sensitive land without obtaining consent because one of WDHL’s main shareholders was an overseas person.  The High Court said this should have been avoided by undertaking appropriate enquiries.

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The High Court ordered Chor Ltd to:

• Pay a civil penalty of $539,917.47
• Costs of $15,000.

Mr and Ms Zhou acquired equitable and legal interests in a residential property in Auckland. The property was subsequently sold to Chor Ltd (Mr and Ms Zhou were the directors and shareholders at all material times). The transactions required consent.

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The High Court ordered:

• FFG Investment Limited to pay a civil penalty of $82,500
• Grand Sky Limited to pay a civil penalty of $40,500
• FFG and Grand Sky together to pay $10,000 costs

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

News item and copy of judgment

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.

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The High Court ordered the defendants to pay a total of $2,970,256 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.

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Agria (Singapore) PTE Ltd (part of

Agria Corporation) and Mr Alan Lai

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.

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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.
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Carbon Conscious was ordered by the High Court to pay a civil penalty after using an associate to purchase sensitive land on its behalf.

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Xindongyue Group (NZ) Limited obtained consent to acquire approximately 8.2 hectares of sensitive land at Clarks Beach, Waiau Pa, Auckland.  The consent holder failed to meet its conditions of consent and a disposal notice was issued accordingly in June 2020.

In May 2021 the property was sold to a New Zealand company who did not require consent.

Overseas investors acquired approximately 13 hectares of land without consent. The investors have been issued with a notice under Section 41F of the Overseas Investment Act 2005.

In November 2020 the property was sold to a New Zealand citizen and did not require consent.

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 required it to dispose of the property in accordance with a disposal framework set out in its consent conditions.

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Overseas Investors acquired three properties totalling 327 ha of sensitive land in the Twizel area without consent due to incorrect legal advice. We entered into a settlement agreement with the investors which required them to sell two of the properties have been sold. The investors applied for retrospective consent to retain ownership of the third property, but the application was declined. All three properties have now been sold.

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Tresorelle (NZ) Limited acquired interests in sensitive land in August 2003.

76% of the shares in Tresorelle were held by a New Zealand person.  However that person was holding the shares in trust for an overseas shareholder and was subject to his direction.  This made Tresorelle an associate of the overseas person and consent should have been sought under the Overseas Investment Act 1973 when the land was acquired.

In 2011 the 76% shareholding was transferred to another New Zealander on similar terms and consent should have been sought for that transaction as well.

It is accepted that breaches of the Act have occurred but that proceedings for the substantive breach in 2003 are now time barred.

Tresorelle has agreed to enter an enforceable undertaking acknowledging the breach and has disposed of all of its interests in the land.

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JH and JL acquired equitable interests in residential land as associates of QL, an overseas person, without first obtaining consent under the Act.

The regulator accepted an enforceable undertaking from the parties.

The undertakings resolve the associate relationship concerns and provide certainty the overseas person will have no further involvement with the property.

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Aviation School of New Zealand Ltd

Eagle Flight Training Ltd

BRJ Consulting (2015) Ltd

Monash Investments Ltd

Associates of an overseas person acquired sensitive residential land without consent.

The regulator accepted an enforceable undertaking from the parties.

The undertakings resolve the associate relationship concerns and provide certainty the overseas person will have no further involvement with the property.

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Settlement requiring CRV and ABS to divest of a leasehold interest in sensitive land and apply for retrospective consent for second leasehold interest, each acquired without obtaining consent under the Overseas Investment Act 2005. A warning letter has also been issued for related breaches – see below.

Settlement related to an investigation into JBS Australia’s requirement for individuals with control to remain of good character under conditions of JBS Australia’s investment in Scott Technology Limited (Scott).

The Overseas Investment Act Office (OIO) has settled its investigation into JBS Australia following possible links to a Brazilian corruption scandal.

The OIO has concluded that the individuals linked to the corruption scandal (Joesley and Wesley Batista) are not exercising control over JBS Australia and its investment in Scott.

The OIO is also satisfied that the Brazilian corruption scandal occurred offshore and that New Zealand investors were not put at risk.

If Joesley and Wesley Batista assume any control over JBS Australia in the future, the OIO may take stricter measures and JBS Australia may be required to sell its investment in Scott.

Agria (Singapore) PTE Ltd (part of

Agria Corporation) and Mr Alan Lai

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: 

The settlement related to FGHL’s role in the transaction described in the New Forest entry below. 

Read the warning issued to FGHL in the Warnings section below

New Forests Asset Management Pty Limited (New Forests) and

Wairarapa Estate Limited (WEL)

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 warning issued to the parties in the Warning section below

Warning for breach of a number of conditions of consent

Warning for directly and indirectly acquiring interests in sensitive land without obtaining consent. The land is no longer owned by CRV or ABS.

Warning to Mr Dickie that his company breached the Overseas Investment Act 2005.  The breach occurred when Roger Dickie Hadleigh Limited entered an agreement for sale and purchase of sensitive land on behalf of an overseas investor in May 2018.  The Overseas Investment Office consider he was acting as an associate of the overseas person and that he therefore required the consent of the Overseas Investment Office.  He is warned that any future conduct of this kind may result in the Overseas Investment Office taking proceedings against him.

Warning for acquiring an interest in shares in companies which own sensitive land without consent in 2014 and 2015.

Warning around acquiring sensitive land without prior consent by using a New Zealand associate to allow amalgamation of land and delay the need for consent.

Warning in relation to incorrect legal advice given to overseas persons.
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A warning for obtaining an interest in sensitive assets, on 1 April 2016, without consent.
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Warning for acquiring sensitive land without consent in 2005

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Warning for acquiring sensitive land without consent in 2015. (The matter was also subject to a retrospective application for consent.)

Read the warning (HEAL):

Read the warning (SPL):

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):

Read the warning (Ceol and Muir Inc):

Warning in relation to a false statement made to the OIO.

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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.

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