The Chinese backed bid to buy 20 North Island farms formerly owned by Allan Crafar has been rejected by the Government.

The deal was part of a supply arrangement between New Zealand registered company UBNZ Funds Management and Hong Kong company Natural Dairy Ltd – conditional on Overseas Investment Office (OIO) approval.

The deal, which was fronted by New Zealand resident May Wang, has been tied up while a Serious Fraud Office (SFO) investigation takes place into dealings between Natural Dairy and another May Wang owned company, UBNZ Asset Holdings.

However, the deal was rejected by Government representatives, the Land Information Minister Maurice Williamson and Conservation Minister Kate Wilkinson, who backed up the OIO’s earlier recommendation.

The pair's decision cited concerns over Ms Wang’s character and her business background in the wake of her bankruptcy last week and an investigation into her business dealings by the SFO.

Where this leaves the deal now is anyone’s guess, with Natural Dairy still reportedly interested in the farms despite Ms Wang’s absence.

Spokesman Bill Ralston says with Ms Wang out of the picture, they will have to decide what kind of action they take now, on their own.

“She’s out of the process, and Natural Dairy will now proceed with the application in its own name.

“To be honest we could have seen this coming.”

If the Natural Dairy bid falls over, however, State Owned Enterprise Landcorp could be back in the running, after an earlier bid failed to impress the Crafar receivers.

Landcorp CEO Chris Kelly says they won’t push the envelope but if receivers KordaMentha open a dialogue, they’d be happy to discuss a deal.

“I think it’s unlikely, but if they approach us with some alternative, clearly we might look at it.

“But in the meantime, we won’t be doing anything if there’s no approach from the receivers.”

KordaMentha were unavailable for comment, stating they had not had time to review the ministers’ decision.