As regulator prosecuting investors for property purchases in breach of the Overseas Investment Act, Land Information NZ allowed Auckland investors Jin Ouyang and Jie Xie use proceeds of tainted transactions to buy a family home while at the same time they faced prosecution for their part in multiple deals not complying with the Act.
They were later fined $225,000; part of Investment Act penalties imposed by the High Court totalling near one million dollars.
Whether profits made on their deals in breach of the Act must be surrendered is yet to be decided.
Ms Ouyang worked in real estate. Her spouse Mr Xie is a businessman. Both are New Zealand residents.
One year after rules governing sales of land to overseas buyers were extended to purchase of residential real estate, the two connived with off-shore investors who speculated in New Zealand property, providing funds but keeping their identities hidden.
On the surface, Ms Ouyang or Mr Xie were the apparent owners of properties purchased across Auckland. In the background, equity capital was provided by investors in China with an agreement they would share in net profits on realisation. Where loan finance was needed, Mr Xie fronted New Zealand banks as the sole investor.
The first transaction in breach of the Act, in January 2019, saw Ms Ouyang’s mother provide $219,500 for purchase of a one bedroom inner-city apartment, registered in the name of her daughter. Daughter and her spouse paid $134,000 costs levied by the body corporate for recladding.
The High Court was told that as at 2025 this apartment had a rateable value of $420,00. Remediation costs have exceeded any capital gain.
Making a profit is not a pre-condition for fines imposed following breaches of the Overseas Investment Act.
Ms Ouyang was ordered to pay a penalty of $67,500.
The High Court was told the property remains registered in her name, supposedly holding it on behalf of her mother. No penalty was imposed on her mother. She lives in Shanghai.
Mr Xie personally was fined $157,500 for a series of property transactions having a Hong Kong investor as a secret partner. They agreed to share net profits.
Each development was carried out in the name of a company controlled by Mr Xie.
Mr Xie’s offshore associate was kept off the public record; so as not to alert the authorities, Mr Xie admitted.
A Remuera property on Norman Lessor Drive was purchased by their company for $2.08 million; sold two years later for $3.5 million. No redevelopment was undertaken on site other than obtaining building consent for construction of four townhouses.
The High Court was told Ms Ouyang and Mr Xie were permitted by Land Information to draw down on the net sale proceeds to purchase a family home on Riddell Road in Auckland’s eastern suburbs.
A second residential development at Mission Bay was partly finished at time of the High Court’s Overseas Investment Act penalty hearing.
The court was told concealed equity funding from Hong Kong for both Norman Lessor Drive and Mission Bay totalled $956,000. In addition, Ms Ouyang’s mother pitched in $597,000 for Norman Lessor Drive.
Companies involved in the Norman Lessor Drive purchase and sale were ordered to pay an Overseas Investment Act penalty of $746,600.
A penalty for breach of the Act with the Mission Bay development was postponed, pending completion of construction and subsequent sale.
The High Court ordered Ms Ouyang’s inner city apartment be sold.
Net proceeds of sale from both Mission Bay and the apartment are to be held in a lawyer’s trust account pending a later court hearing on who keeps the profits.
The High Court imposed no such restriction for residual profits remaining from sale of Norman Lessor Drive after payment of the $746,600 penalty.
Land Information NZ v. Ouyang – High Court (1.09.25)
25.193