New Zealand Labour Party

Minister must take responsibility for new OIO lapses

“Fresh revelations that cast doubt on two Overseas Investment Office (OIO) decisions show the Government’s oversight of foreign investment is practically non-existent, Labour’s Land Information spokesperson David Cunliffe says.

“New Zealanders should feel confident that our prime assets are being safeguarded by the OIO and that our international reputation is intact. International investors have to meet the Act’s good character requirements.

“Louise Upston claimed the Onetai Station decision – where the purchasers were found ‘criminally responsible’ for environmental pollution in Argentina were allowed to buy an iconic Taranaki farm – was ‘a one off’.
“Labour has verified that investors, Rafael and Federico Grozovsky, were implicated in not one, but two cases of serious toxic pollution. The second example relates to their operation of a sugar refinery in 2007 where they were implicated in toxic air pollution incident causing lung cancer and premature deaths. Today in Parliament the Minister acknowledged she knew about this but kept if from the public.

“Land Information’s chief executive called the Onetai Station bungle a ‘regrettable lapse’ and promised the Land Information Minister it wouldn’t happen again. Now it turns out there is another OIO approval with a dubious track record.

“Last year the OIO approved Montagu Investment Holding’s purchase of Radius Properties, but new information raises questions about that decision. The majority owner of Montagu, Harald McPike, was the company principal and co-owner of an American forex merchant, Institutional Liquidity LLC, when it was investigated by US financial regulators and banned from trading.

“The Minister needs to explain whether she was aware of the issues with Montagu’s majority owner when she signed off on the deal or whether this is another ‘dropped ball’.

“The performance of the OIO, with a 99.85 per cent approval rate in the past five years and a growing list of blunders shows this increasingly out of touch Government has had no interest in addressing the obvious failings of the agency.
“The Minister needs to take responsibility. She must clarify whether she has full confidence in her LINZ CEO and either back him or sack him,” David Cunliffe says.