A New Zealand court has blocked the sale of dairy farms to a Chinese company, amid growing concerns overseas investors are snapping up too much of the country's valuable agricultural land.
The High Court ruled against a New Zealand government decision to sell 16 farms to a Chinese investor, saying that the government needed to re-evaluate the sale under stricter guidelines.
Chinese firm Shanghai Pengxin, which is run by wealthy property developer Jiang Zhaobai, had hoped to spend more than $164 million buying and improving the farms.
The High Court decision is the latest twist in a long running saga between advocates who say selling the farms will encourage international trade, and locals who fear losing too much arable property to foreign investors.
In his verdict, High Court Judge Forrest Miller said the New Zealand government had not correctly assessed the economic benefits offered by the Pengxin deal.
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Instead of evaluating how the Chinese deal would improve the current state of the farms - which are run-down and in poor repair - the government should have compared the economic benefits of the transaction against what a New Zealand investor could offer, he said.
The Pengxin sale was been challenged by a consortium known as the Crafar Farmers Independent Purchase Group, who had originally offered $143.5 million for the 8000 hectares of farmland.
We're very pleased with the decision from Justice Miller, said Alan McDonald a spokesperson for the consortium.
Our view is that Shanghai Pengxin never brought any real economic benefits to New Zealand.
Cedric Allan, a spokesman for Pengxin, said he still expects the deal to go ahead.
Personally, for me, the ruling is a big surprise, I hadn't read the Overseas Investment Act in that way, he said.
We're still pressing ahead as fast as we can, and we're still confident we are going to get the final signoff.