In
what is the first Overseas Investment Act prosecution for buying land without
consent, local subsidiary of listed Australian company Carbon Conscious Ltd was
fined $40,000 for being party to a scheme concealing its purchase of sensitive
land.
Carbon Conscious NZ Ltd, in a hurry during
2012 to plant new forest in order to earn carbon credits for sale, used a
newly-formed company owned by the general manager’s wife as interim purchaser so
that planting could get underway whilst an Overseas Investment Act application
worked its way through the political process.
The High Court was told Gisborne-based Katey
LR Investments Ltd was used for the $335,000 land purchase. This purchase was supported by a side
agreement. Carbon NZ agreed with Katey
LR to acquire the trees and their attached carbon credits and also signed an
option to purchase the land. Sole
director and shareholder of Katey LR Investments is Katey Louise Reynolds, wife
of Carbon NZ’s general manager. Katey LR
is deemed to be an “associate” of Carbon NZ.
Since Carbon NZ was required to get Overseas Investment consent prior to
the purchase, so too should have Katey LR.
Carbon NZ said it acted on legal advice
in setting up an interim purchaser. It
has since changed lawyers, it told the court.
Land
Information v. Carbon Conscious – High Court (4.04.16)
16.051