The Court of Appeal has turned down a bid by merchant banker Sir Michael Fay and two Maori trusts to stop the sale of 16 Central North Island farms, saying it was satisfied with the general business acumen and experience of the Chinese buyer.
The court says Jiang Zhaobai's ability to bring himself from humble beginnings to become "a person of some stature in the Chinese commercial world" would satisfy criteria to approve the sale of the Crafar family farms.
"The information provided to the ministers was sufficient to enable them to determine that he and the other controlling individuals had generic business skills and acumen relevant to the Crafar farms investment," Justice Terence Arnold said in delivering the judgment on Tuesday.
The court wasn't swayed by the argument that Land Information Minister Maurice Williamson hadn't delved deeply enough into the success of Pengxin's agribusiness investments.
"The agribusiness experience was only one of the factors relied on by the ministers in concluding that the controlling individuals had the necessary business skills and acumen," the judgment said.
The court noted the land information and finance ministers decided the foreign investment would have a substantial benefit to New Zealand, creditors are still waiting on repayments, and that the farms are being operated by the receiver in a manner than presumably "involves minimal further investment".
The farms were tipped into receivership in 2009, and owed bankers some $274 million as at April, according to the latest receivers' reports.
Shanghai Pengxin's proposal to enter into a joint venture with state-owned Landcorp Farming recognised its lack of experience in the dairy sector, and satisfied any concerns the ministers might have had, the judgment said.
Sir Michael, who fronted the Crafar Farms Purchase Group, said he was disappointed with the decision, and that "the majority of New Zealanders have significant concerns about the issue".
Haride Peni, chairman of the Tiroa E and Te Hape B Trusts, said Kiwi farmers would become disenfranchised with the system.
"It seems all you need to enjoy the privilege of owning New Zealand farm land is deeper pockets and some knowledge of business to become a major owner of dairy farms," he said.
Pengxin welcomed the decision, saying its "immediate priority is to begin the process of improving the farms, increasing production, and making sure we comply with all of the conditions imposed by the Overseas Investment Office," according to a statement issued by spokesman Cedric Allan.