The Social Credit party has filed a court challenge to the sale of Westland Milk to a Chinese dairy giant and has launched a public fundraising campaign to help pay for it.
The Overseas Investment Office (OIO) approved the sale of Westland Milk to Chinese dairy giant Yili in July, and final approval was granted by the High Court.
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Farmer shareholders had earlier agreed to the sale of the 82-year old dairy co-operative, with 93 percent voting in favour of the $588 million sale.
The sale needed OIO consent because Yili was buying sensitive land (4.8 hectares of residential land) and significant business assets (worth more than $100 million)
However, Social Credit was among the critics of the sale, unhappy that the co-op was sold into overseas investors.
It has this week filed papers in the High Court in Wellington to seek judicial review of the OIO's decision.
Party Leader Chris Leitch said the party was concerned that the OIO may have failed to apply a much stricter set of criteria under the Overseas Investment Act 2005 which would have seen Ministers, not the OIO, make the final decision.
"The Ministerial Directive to the OIO in November 2017 clearly sets out criteria on how such applications should be considered," he said.
He said the directive states that "the merits of overseas investment in the primary sector can be less compelling given that we are already world leaders in this area.''
"Few would disagree, and it is important for kiwis to have confidence that the OIO, which is the gatekeeper for overseas investment in this country, is applying the rules properly."
Leitch claimed there had been a tidal wave of applications from overseas entities that want to snap up New Zealand's best agricultural land and agricultural and horticultural businesses, and the party was taking a stand on the issue.
"Our view is that's not good for the long term future of New Zealanders, so we're putting a stake in the ground".
The party is also seeking financial support to fight the case and has set up a Give-A-Little page for donations for the legal challenge.
In July the OIO said it approved the application because it met all the tests required under the Overseas Investment Act.
OIO land information New Zealand group manager Vanessa Horne said the law was clear and that Yili met all the requirements needed to buy Westland.
"It's important to remember that the tests for this investment are quite narrow. Yili is not buying rural land, which involves very different tests for investors," she said.
"The benefit to New Zealand test doesn't apply to this investment because it doesn't involve rural land," said Horne.
Westland Milk chairman Pete Morrison told Newshub earlier that sale of the 82-year-old co-operative was the best thing for farmer shareholders and the region.