Wellington - Dubai World, the troubled state-owned conglomerate whose financial difficulties triggered a crisis on world stock markets, is reportedly trying to buy farms in New Zealand, ringing alarm bells there Friday. The Federated Farmers organization, which lobbies for farmers, warned its members to undertake strict due diligence before agreeing to sell in the light of reports that scheduled deposits had not been made.
And the Green Party called on the government to tighten foreign investment regulations to prevent a land grab by overseas interests.
A group of indigenous Maoris had contracted to buy nearly 30,000 hectares of dairy, sheep, beef and deer farms in Southland province, the Otago Daily Times newspaper reported.
A spokesman for the purchasers, Wynn Murray of Invercargill, told the paper the Maoris had financial backing from overseas.
He refused to confirm the deal was being funded from Dubai, but said there was an option for milk from the farms to be processed specifically for markets in Dubai.
The newspaper, which said 28 farms valued at 150 million New Zealand dollars (105 million US dollars) were being bought, said two of Southland's largest rural real estate companies, PGG Wrightson and Southern Wide, had declined to deal with the Maori trust, and the farms had been bought through other real estate agents.
"I am extremely nervous of reports that no deposits are being taken," said David Rose, Federated Farmers rural security spokesman. "It's pretty fundamental that a deposit be exchanged as a tangible sign of good faith.
"Our second concern relates to the financial backer being reported as Dubai World, the Emirates-owned and -controlled corporate lender."
He noted that last month, Dubai World was close to defaulting on a substantial part of its 60-billion-US-dollar debt and on Monday Abu Dhabi had injected 10 billion US dollars to save it from an immediate default.
"Given these pressing business issues, we are naturally concerned that the supposed backer may not be prioritizing the purchase of Southland farms," he said. "The fact that a reported deposit milestone has already been missed is further cause for alarm."
Russel Norman, co-leader of the Green Party, said, "New Zealand needs to tighten its rules around overseas investment as China and the Gulf states go on a worldwide shopping spree for prime land.
"Overseas interests will be looking to buy New Zealand's agricultural land due to the long-term strategic value of such purchases. We need the Overseas Investment Office to be scrutinizing these deals."
