Sour sale trial shines light on HFA dealings
A Chinese-backed company’s dealings with a WA family were put under the blowtorch yesterday at the start of a Supreme Court trial into the collapse of an $8 million deal to buy farmland near Lake King.
The proceedings also shed light on the conduct of Heilongjiang Feng Agricultural over a remarkable 12-month period which eventually saw it pay $70.5 million for three WA farms comprising 36,500 hectares.
HFA also signed a contract to buy a farm owned by Ian and Carolyn Tonkin in late 2011 but the purchase stalled and was never completed.
The Tonkins launched court action in September 2013 to enforce the sale contract. They also sought interest on the agreed purchase price of 9 per cent per annum from January 2012 to the date of payment of the $8 million purchase price, plus damages.
Jason MacLaurin, representing the Tonkins, told the court yesterday that HFA and its lawyers had given multiple assurances the deal would be completed before moving to terminate the sale contract in October 2013.
Mr MacLaurin said copies of emails and other documents before the court showed HFA blamed problems with accessing funds from China for delays in settling the purchase.
He said difficulties with the transfer of funds were blamed for an initial delay in paying an $800,000 deposit on December 7, 2011.
Documents submitted to the court indicate HFA continued to have difficulties accessing the funds through most of 2012.
Other documents show the Foreign Investment Review Board then launched an inquiry into HFA after revelations it had links to giant Chinese state-owned entity Beidahuang.
FIRB had written to HFA’s lawyers in 2011, saying that on the information provided the plans to buy farms in WA were exempt from its scrutiny.
In December 2012, FIRB notified HFA it had reason to believe the company was linked to a state-owned entity and that it should not proceed with any farm purchases or direct investments until after an inquiry.
Allion Legal, acting on behalf of HFA, wrote to FIRB in January 2013 to provide details of the relationship with Beidahuang. In the letter, HFA expresses regret for any misunderstanding and any oversight.
FIRB gave HFA a green light to proceed with purchases and direct investments in February 2013.
Mr MacLaurin said most of the Tonkins dealings had been with HFA director Harold Sim and often involved communication via a third party in Landmark agent Glenn McTaggart.
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