Official data are not available as to the nature of Hong Kong investment in New Zealand. To provide that data, an analysis of the decisions of the Overseas Investment Commission (OIC) from December 1989 to September 2000 was made. The results are tabulated in the appendix. It should be noted that they are a summary only. Naturally they can reflect only information released by the OIC: some information is suppressed by the Commission as being confidential. If investments are later sold to a New Zealand party, that will not be recorded by the OIC. Further, some investment does not require OIC consent at all. Notably this includes investment, not involving land or fisheries, which is worth less than $10 million, or less than $50 million since November 1999, or involves the acquisition of less than 25% of a company.
An example of the latter escaping OIC records was the controlling interest gained by South East Asian interests in Brierley Investments Ltd (BIL) in 1996. This acquisition eventually led to the company moving its registration to Bermuda and its headquarters to Singapore.
Note also that the OIC has changed its presentation of investor origin over these years. It is therefore possible that some companies which are registered in Hong Kong but owned elsewhere have been missed from this analysis.
The 72 investors listed cover primary and secondary industry, but significantly in terms of the proposed FTIA, are strongly focused on tertiary industry: services – and primarily property investment. This is consistent with Hong Kong's general pattern of investment overseas.
An important feature of the “Hong Kong” investment is the number of instances where the ultimate ownership is not in Hong Kong. This is consistent with the pattern of “Hong Kong” investment generally as described above. In 12 of the 72 cases listed, no genuine Hong Kong investment was involved, and an additional five included Hong Kong investors among third country investors. Countries represented whose investors are using Hong Kong as a base to invest in New Zealand (in addition to investors from Hong Kong itself) include Australia, Bangladesh, China, Indonesia, Luxembourg, Malaysia, Monaco, Saudi Arabia, Singapore, Switzerland, the U.K., and the U.S.A. In addition, in two instances, New Zealand investors were using Hong Kong companies to invest here.
Fourteen of the 72 investors listed were using tax havens. They came from the following countries: Australia, Hong Kong, Luxembourg, Monaco, Singapore, Switzerland, the U.K., and the U.S.A. The tax havens identified are Bermuda, British Virgin Islands, Cayman Islands, Guernsey, and Jersey in the Channel Islands.
It should also be noted that of the genuinely Hong Kong-owned investments, approximately 27 were small investors in forestry, agriculture, or lifestyle developments with investments of a few tens of thousands of dollars. These forestry investments are essentially passive, with management in the hands of a local forestry company which specializes in selling small blocks of forestry land to raise funds for the forestry development.
On the other hand, some of the Hong Kong-registered companies owned outside Hong Kong are major investors in New Zealand. Examples include
- Hind Properties Ltd of Singapore (commercial property)
- Diverse companies owned by the Tiong family of Malaysia
- Winstone Pulp International Ltd of Indonesia (16th largest forest owner in New Zealand)
- Wenita Ltd, controlled in China (10th largest forest owner in New Zealand)
- Southern Pacific Hotel Corporation (NZ) Ltd of the U.K. (hotels)
- CDL Hotels New Zealand Ltd of Singapore (biggest hotel owner in New Zealand)
- Monaco Corporation (formerly Transmark), of Monaco (appliance distributor)
Further details and other examples are given below.
Primary industry
Interests include forestry, fish farming, sheep, cattle and deer farming, market gardening, flower nurseries, orchards, viticulture, berryfruit, sphagnum moss, coal mining, and lifestyle blocks. A total of 32 of the investors were engaged in primary industry but most of these are relatively small holdings (including 12 small investors in forestry, plus agriculture and lifestyle developments with investments of a few tens of thousands of dollars noted above). The principal exceptions are in sheep and cattle farming, fish farming, forestry and mining.
This includes a number of significant stations, among them the historic 13,686 hectare Cecil Peak Station on Lake Wakatipu near Queenstown, one of New Zealand's largest high country stations, owned by the Morningside Asia Group of Hong Kong through Portmore Enterprises Ltd of the British Virgin Islands; a 37.5% interest in a 392 hectare Horowhenua sheep and cattle farm; and a pastoral lease of 8,167 hectares at Mt Pember Station, Lees Valley, a 2,271 hectare sheep and deer farm, and a further 1,889 ha. at Lees Valley, all at Oxford, Canterbury, owned by the same Hong Kong investor.
Fish farming is dominated by the Tiongs, one of Malaysia's most powerful and wealthy families, who own (amongst other assets) 80% of New Zealand's king salmon farming through The New Zealand King Salmon Company Ltd (recently involved in controversial genetic engineering experiments on their salmon). Most of their assets are owned through Hong Kong companies. They bought part of the fish farming interest from Sheikh Suliman Olayan and family, of Saudi Arabia which owned 24.8% of Regal Salmon through their company, Competrol Pacific Ltd of Hong Kong. Other Hong Kong resident investors own smaller fish farming holdings.
Forestry exemplifies the variety of nationalities of investors who use Hong Kong as a port of convenience, but also involves a significant proportion of New Zealand's production forestry. The major interests are all from outside Hong Kong, using a Hong Kong company to own the New Zealand forestry assets.
The Tiongs of Malaysia (see above) own Ernslaw One, the sixth largest forest owner in New Zealand, owning or managing 46,000 hectares of forests, and Oregon Forestry (NZ) Ltd.
Two Indonesian residents believed connected to the Suharto regime own Winstone Pulp International Ltd, the 16th largest forest owner in New Zealand, owning or managing 17,000 ha. of forests and the Karioi Pulp Mill through Perfect Match Investments Ltd, registered in Hong Kong.
Wenita Ltd, the 10th largest forest owner in New Zealand with 25,000 ha. of forests mainly in Otago and Southland, is owned 55.4% in China by Sinotrans (NZ) Ltd, a subsidiary of the Government-owned China National Foreign Trade Transportation Corporation, and the balance in Hong Kong.
In addition there are 11 small, essentially passive, Hong Kong investors, most with management in the hands of a local forestry company which specializes in selling small blocks of forestry land overseas to raise funds to undertake the forestry development.
Mining provides two examples of complex third-party ownership.
Lime and Marble Ltd and DML Mining Ltd, owning over 500 hectares of freehold and leasehold land, and Perilya Mines (NZ) Ltd which owns 2,642 hectares at Earnscleugh, Central Otago (the Earnscleugh Gold Project) are owned by Auriferous Mining Ltd, incorporated in the British Virgin Islands, owned equally by three companies: Tangent International Ltd whose major shareholder is Werner Muller of Switzerland; Campanie International Holdings Inc whose major shareholder is Kwok Wai Chiu of Hong Kong; and Rysaffe Trustee Company (CI) Ltd as trustee for Geoff London of the U.K.
Secondary industry
Hong Kong interests in New Zealand's secondary industry are relatively few, and concentrated in a few investors.
Salmond Smith Biolab, owned by the Tiong family of Malaysia mainly through Hong Kong subsidiaries (see above) owns Click Clack International, a manufacturer of plastic containers; Johns Plastics, an Australian based manufacturer of disposable plasticware; and Artel, a plastics and brushware operation.
As mentioned above, Winstone Pulp International Ltd, owned by Indonesian interests through a Hong Kong company, Perfect Match, owns the Karioi Pulp Mill.
Mainguard Packaging Ltd, the fourth largest packaging company in New Zealand and the biggest in the South Island, is owned by International Packaging Corporation of Hong Kong, and Schroder Capital Partners (Asia), part of Schroders Plc of the U.K. The OIC described the purchasers as: RIFGAC 47 Ltd, a Rudd Watts and Stone shelf company owned by Asia Pacific Fund II, an investment fund “whose investors are primarily large U.S. and European Institutional Investors”
The Amalco Processors meat processing plant at Westmere, Wanganui is owned by River City Properties Ltd, which is 50% owned by Guangdong (HK) Tours Co Ltd of Hong Kong and 50% by Fukuyama Industrial Holdings Ltd of New Zealand.
Tertiary industry: Services
The bulk of Hong Kong investment lies in this area - in New Zealand as it does internationally. A total of 39 of the 72 investors were engaged in tertiary industry and, with the exception of 11 small lifestyle property purchasers, most are significant holdings. Interests cover civil engineering, commercial property, construction, entertainment, grocery wholesaling and retailing, hotels, housing subdivision, importing and distributing, lifestyle property development, portfolio investment, publishing, retail, tourism and tourist lodges.
The most significant categories are commercial property, hotels, construction and civil engineering, groceries, other retail, importing and distributing, and housing subdivision.
Thirteen of the investors are engaged in commercial property, most with buildings in Auckland's central business district. At least five are owned through tax havens, though as far as can be told, all but four are owned in Hong Kong.
The most significant two are the largest listed property owner in New Zealand, Trans Tasman, and Hind Properties of Singapore.
Trans Tasman is the result of a merger in 1995 of Tasman Properties Ltd (formerly Robert Jones Investments) and SEABIL (NZ) Ltd. SEABIL was a joint venture of Brierley Investments Ltd and SEA Holdings Ltd, registered in Bermuda but controlled by the Lu family of Hong Kong. SEA Holdings now owns 54.79% of Trans Tasman directly, after a long series of public floats and share rearrangements and sales between 1991 and 1998. SEA also has substantial investments in China.
Hind Properties Ltd and Hind Hotels International owned by the Jhunjhnuwala family of Singapore have had substantial property holdings in New Zealand. In 1999 the Jhunjhnuwala family sold 53.9% of the shares in Hind Hotels International (some owned through a Cayman Islands subsidiary) to DBS Land Ltd of Singapore, and as part of the deal they bought the New Zealand properties from Hind Hotels through Hind Properties. The properties include Masport Industrial Estate, Barrack Road, Panmure; Wiri Woolstore, 122 Kerrs Rd, Wiri; and Central Office Park, Penrose, all in Auckland.
Also of note is Colwall Enterprises Ltd, a subsidiary of Indonesian-owned Perfect Match Investments Ltd which also owns Winstone Pulp (see above). Colwall owns the Queen City Centre complex, Albert/Elliott St, Auckland.
CDL Hotels New Zealand Ltd, which owns or manages the Kingsgate, Millennium, Copthorne, and Quality chains, is the largest hotel owner in New Zealand. While it is ultimately owned 52.8% by City Developments Ltd of Singapore, it is a subsidiary of CDL Hotels International Ltd, incorporated in the Cayman Islands, and based in Hong Kong. The group owns commercial property and hotels in South-east Asia.
Southern Pacific Hotel Corporation (NZ) Ltd bought the privatized Tourist Hotel Corporation in 1990. Southern Pacific Hotel Corporation is owned by the Hale Corporation Ltd of Hong Kong through a British Virgin Islands subsidiary, Halsey Holdings Ltd. However, its ultimate owner is Bass PLC of the U.K., which bought it from the Pritzker family, Chicago, U.S.A., in 2000.
Carlton Hotels Ltd of Hong Kong, owned by Dr Li Dak Sum and his family interests, owns the Pan Pacific Hotel, Auckland.
The Downer Group Ltd, a major construction and civil engineering firm formerly based in New Zealand but now headquartered in Sydney with significant international operations is owned 43.9% by Paul-Y-ITC Construction Holdings Ltd. Paul-Y is incorporated in Bermuda, but listed in Hong Kong. Hutchison Whampoa of Hong Kong has a further 12.5%. The remainder of Downer is owned in the U.S.A. and Australia.
Paul-Y is a major company, its subsidiaries providing construction, engineering, mining, resource, infrastructure and telecommunications services. They also manufacture concrete products and develop property. It operates in Hong Kong, China, South East Asia, Australia and New Zealand.
Hutchison Whampoa is a Hong Kong based multinational conglomerate with a market capitalisation of US$62 billion. It is part of the Li Ka-shing group of companies, which together represent over 15% of the total capitalization of the Hong Kong stock exchange.
Since Paul-Y acquired Downer, it has taken over Works Geothermal Ltd, including 15 hectares of land at Wairakei; Works Civil Construction Ltd; and Bitumix Ltd and bitumen plants at four ports. Works Geothermal and Works Civil Construction were both privatizations from the former Ministry of Works and Development.
The 81 supermarket Big Fresh and Price Chopper supermarket chain, Woolworths (New Zealand) Ltd, and Associated Wholesalers are owned by Dairy Farm International Holdings Ltd, part of the old colonial company, Jardine-Matheson. Dairy Farm runs supermarkets, drugstores, and convenience stores in mainland China, Hong Kong, Taiwan, Malaysia, Singapore, Indonesia, Australia, and India. Jardines is incorporated in Bermuda and listed on the Hong Kong, London and Luxembourg stock exchanges. According to its 1999 Annual Report, 52% of its shareholders' funds are in Hong Kong or Mainland China. Jardines was infamous in its distant past for selling opium to China and sparking the Opium Wars.
DFS New Zealand Ltd (Duty Free Shoppers) is owned by a subsidiary of Duty Free Shoppers International Ltd, DFS Holdings Ltd of Bermuda, owned in Hong Kong.
Grocery distribution is mentioned elsewhere. Salmond Smith Biolab, owned by the Tiongs of Malaysia (see above), claims, with its sister company Selby-Biolab in Australia, to have the largest scientific distribution network in Australasia (ComputerWorld New Zealand, “Biolab uses summit to announce marketplace”, http://www.computerworld.co.nz/webhome.nsf/UNID/5B05F534E2A18A30CC25698B000390DC!opendocument, 6/11/00).
Monaco Corporation Ltd (formerly Transmark) distributes consumer products such as toasters, TVs, home security systems, watches and cameras. It is owned by Shriro Pacific Ltd, owned by Mark Shriro of Monaco, through Tectoria of the Cayman Islands, registered in Hong Kong.
Clipsal Industries Ltd (formerly Bluepoint Products Ltd), is an electrical products distributor owned by Stenhouse Investment Ltd of Hong Kong. In March 2001 it bought more than 5% of Christchurch electrical goods manufacturer, PDL Holdings.
The Tiongs own Neil Construction which is an active housing subdivision developer, mainly around Auckland. A number of other investors have developed subdivisions in a smaller way – mainly in rural areas for lifestyle blocks. For example seven Hong Kong residents took a 45% interest in Bridgethorne Holdings Ltd, which owns 103 hectares at Kerikeri, Far North, in 1995 in order to subdivide the land into 12 orchards, 12 lifestyle blocks, a main farmhouse and a small strip for a new golf course. Tenbless Development Ltd of Hong Kong bought 3.8 hectares in North Auckland in 1990 for residential subdivision.