Chinese Investor Applies for Exemption for Acquisition Skip to content

Chinese Investor Applies for Exemption for Acquisition

ogmundur-jonasson_radherraMinister of the Interior Ögmundur Jónasson (pictured) confirmed yesterday that he has now received an application from Zhongkun Group, the company of Chinese investor Huang Nubo, for an exemption from the Icelandic law for the acquisition of Grímsstadir á Fjöllum, a 30,000-hectare (300-square-kilometer) piece of land in northeast Iceland.

According to Morgunbladid, negotiations between Huang and the owners of the land began early this year, which concluded with an agreement that the land would be sold for ISK 1 billion (USD 8.7 million, EUR 6.1 million).

Before that, Grímsstadir á Fjöllum had been for sale for about ten years. Only one other formal offer was received, from an Icelander in 2007, which the owners rejected.

As for his motives, Huang has said that as a tourist he has always found Iceland an interesting place and therefore asked his Icelandic friends to suggest locations where he could build up tourism in the country.

He was sent a link to the website where Grímsstadir was advertised for sale, grimsstadir.com, which the landowners established a few years ago but has now been closed. The website showed an interesting location in untouched nature, Huang said, which he found attractive.

Jónasson has issued his concerns about the acquisition, especially in regards to the ownership of natural resources where he says the legal framework is shaky.

On RÚV’s news magazine Kastljós last night he said that above all he would be thorough in his review of the application and consider it carefully.

“He is not simply applying for a lot to buy a hotel; that would be a different matter,” the minister commented, explaining that this is a 300-square-kilometer piece of land, 0.3 percent of Iceland’s surface, and we have to ask ourselves how much of the country are we willing to sell off to foreign ownership. “Would we be prepared to sell it all?”

EEA nationals are legally permitted to buy land and some resources in Iceland but citizens of other countries have to apply for an exemption—unless they circumvent the law by founding a company in an EEA country as in the case of Canadian Magma Energy’s acquisition of the energy company HS Orka—as mentioned on Kastljós.

Jónasson dismissed claims that he is being so skeptical because the investor is a foreigner, saying it is his role to protect the nation’s interest and that he will honor that role in his review of the application, and will not be bullied into doing it hastily.

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ESA

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