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OIO admits Taranaki farm botch up

NZ NewswireNZ Newswire 2/05/2016 By Dave Williams

Cows on New Zealand farm © Getty Images Cows on New Zealand farm The Overseas Investment Office has admitted it blundered over a Taranaki farm purchase by brothers convicted for leaching tanning chemicals into an Argentine river.

The OIO says it failed to tell the land information minister it knew of the pollution incident when it recommended approving the $6-million sale of 1320ha Onetai Station, to Rafael and Federico Grozovsky, via their Panama-based company Ceol & Muir.

The Grozovskys, who live in Italy and Argentina, were convicted in 2012 because a tannery they owned leaked chemicals into Argentina's Lujan River.

According to documents obtained by the Labour Party and translated from Spanish, the river was polluted by cancer-causing chromium and a resident suffered from ill health.

A court ordered the seizure of assets worth the equivalent of $NZ10,000.

The conviction didn't stop them passing the OIO's good character test and their company, Ceol & Muir, was given approval to buy the farm in 2013.

"Relevant information was not passed on to government ministers. I have advised Land Information Minister Louise Upston of this situation and apologised," chief executive Peter Mersi said on Tuesday.

"I have also given her an assurance there will be no repeat of this situation in future."

The OIO has a robust process "but on this occasion, it does not appear to have been followed. This was a regrettable lapse", Mr Mersi said.

NZ First leader Winston Peters says the OIO was a rubber stamp body and he isn't surprised by the news.

"It's a disgrace for a nation to have such a body in charge of any of its policing of rules and laws."

But Ms Upston denies the office is incompetent and says the case does not call into question other approvals.

"With this application that was considered, yes they dropped the ball. The person who was considering it had information that they didn't pass on to ministers."

Mr Mersi said the OIO was reviewing its process around assessing good character of foreign buyers after going over the Ceol & Muir case.

An independent review will also be carried out.

Since the 2014 approval, ministers are now alerted to any relevant issues found during the assessment of applications, Mr Mersi said.

OIO staff now search through a list of terms such as conviction, fraud, etc to ensure searches are consistent and thorough.

Mr Mersi said purchasers of New Zealand land must be of good character on an ongoing basis.

Legal action would be considered if the Onetai Station buyers were deemed to be no longer of good character or have provided misleading information, he said.

The OIO's apology came on the same day Prime Minister John Key, in a speech to the Institute of International Affairs, praised the OIO for its rigorous application process.

"For a foreigner to come here they must show they have the skills or the capital or the right attitude to make a difference," he said.

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