Crafar Farms bidder,Sir Michael Fay, says state-owned Landcorp’s negotiations with Chinese company Shanghai Pengxin are ‘nothing more than an attempt to sanitise a deal that stinks in the minds of most New Zealanders’.

Landcorp’s CEO, Chris Kelly, is reported to have said that while discussions with Shanghai Pengxin were ‘incomplete’, it would not be out of the question for Landcorp to end up running the 16 farms.

Sir Michael is part of a syndicate of North Island dairy farmers and Iwi whose $171.5 million bid for the 16 Crafar Farms was spurned by the Official Receiver earlier this year.

Shanghai Pengxin has been waiting nearly nine months for a response from the Overseas Investment Office, to its application to buy the farms for more than $200 million.

Sir Michael says Chris Kelly has his head firmly buried in the sand if he can’t see a conflict in supporting an overseas bid for the farms, and his (Sir Michael's)syndicate's bid was effectively being kneecapped.

He says that Landcorp is ‘at best an average farmer of the vast tracts of land it holds, and generally returns much lower production figures than its neighbours’.

Sir Michael suggests that Landcorp should be the first SOE to be sold off ‘and the whole lot can be returned to New Zealand Farmers who will certainly do a better job of running those farms than a Government department’.