New Zealand Law Society - OIO disagrees with law firm

OIO disagrees with law firm

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The Overseas Investment Office (OIO) says it has not changed the way it interprets the Overseas Investment Act 2005 to define "overseas person", despite what is being claimed by the law firm Russell McVeagh.

The claims relate to the OIO's treatment of custodians that own shares in companies on behalf of New Zealand and overseas investors.

"The OIO's view has always been that if a custodian is an 'overseas person', it may need consent to invest in sensitive New Zealand assets – or in a company that holds sensitive land," OIO Group Manager Annelies McClure says

She says this approach is consistent with that of other regulators, such as the Takeovers Panel, and is well-known to lawyers specialising in overseas investment.

"Lawyers also know the OIO has previously exempted custodians from the need for consent and focussed instead on the custodian's underlying overseas investors.

"Russell McVeagh is certainly aware of our approach, having obtained an exemption for a custodian it represented as recently as 2014.

"We – and I'm sure the market also – would be interested in understanding why Russell McVeagh has now changed its view.

"If it has taken a different view, then it has done so without consulting the OIO. Our view about custodians will come as no surprise to lawyers familiar with the Overseas Investment Act," Ms McClure says.

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