Would-be Crafar farm buyers lose court bid

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MAY WANG: Rejected Crafar farms bidder.
Stuff | 2 Sep 2013

Would-be Crafar farm buyers lose court bid

FIONA ROTHERHAM

The High Court has formalised a wide-ranging asset freeze against the unsuccessful bidders for the Crafar farms, Jack Chen and May Wang.

The pair, known in Hong Kong respectively as Chen Keen and May Hao, have been charged with money laundering and fraud relating to the failed farm deal.

They deny the charges, and this month sought to prevent the order freezing assets valued at $22 million being formalised in the High Court in Auckland.

But in a written decision out today, Justice Patricia Courtney ruled the interim orders should be made permanent.

Wang and Chen had argued correct processes had not been followed for the asset freeze.

The judgment has also revealed the amount of money Chen and Wang are alleged to have made through the fraud.

Wang and Chen are accused of defrauding China Jin Hui Mining Corporation/Natural Dairy Holdings and, consequently, the Hong Kong stock exchange, by inducing them to buy the 22 Crafar farms at an inflated price and without disclosing their interest.

The farms - mostly dairy - owned by the Crafar family were up for sale after being put into receivership in 2009.

A company associated with Wang, UBNZ Asset Holdings (UBAH) was to buy them and Natural Dairy was then to acquire UBAH for $500m.

UBNZ Trustee acted as a vendor for the sale.

Wang, now bankrupt, became an executive director of the company to handle the acquisition but the deal did not go ahead after it was turned down by New Zealand authorities.

It's alleged Wang and Chen arranged for false accounting records relating to the farms to be provided as part of the due diligence.

These accounts overstated the profit of the farms by $50m.

Some of the funds raised by China/Natural Dairy were used to buy four of the farms with $13.7m paid from Wang and Chen in cash and other money used to buy residential properties in Auckland.

It's alleged Chen gained $23.5m from these activities and Wang about $201.6m.

Chen's wife, Ye Fang, is also accused of obtaining substantial funds from deposits into her bank account which she knew, or had reasonable grounds to believe, were the proceeds of crime.

The largest asset of UBAH is a 143-hectare, $4m farm in the Manawatu/Whanganui region but it owes more than $2m to ASAP Finance Ltd and an additional mortgage to NZ Trustee Ltd.

The freezing order was originally made in the Hong Kong High Court in October 2011 in relation to property within and outside Hong Kong. Interim orders were then confirmed by the New Zealand courts in late 2012 and January 2013.

Justice Courtney also rejected an application by an interested party, Wu Rong, to remove a $1.7m property in Auckland's Mission Bay from the freezing order.

Fairfax NZ News
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