REYKJAVIK Nov 25 Iceland said on Friday
it had rejected a bid by a Chinese tycoon to buy a 300-square
kilometre (186 sq mile) chunk of isolated land on the North
Atlantic island for green tourism as it did not meet legal
requirements on foreign ownership.
The plan by Huang Nubo, who was 161st on the Forbes list of
the richest Chinese in 2010, had led to suspicions he was a
stalking horse for Chinese expansionism.
Analysts had questioned the deal's security aspects, given
Iceland's strategic location between Europe and the United
States, and its proximity to the Arctic where a number of
nations are competing to make resource claims.
The 55-year-old, poetry-writing millionaire and former
Chinese government official, had agreed to pay 1 billion Iceland
krona ($8.3 mln) to buy Grimsstadir farm in northeast Iceland,
where he planned to build a golf course, hotel and outdoor
The interior ministry said in a statement the deal did not
meet Icelandic legislation for ownership of land and
requirements laid down for the sale of such to parties outside
the European Economic Area (EEA).
"What we have is not an individual but a Chinese company in
which Huang Nubo is among the main shareholders. The company did
not meet the requirements set by Icelandic law," Interior
Minister Ogmundur Jonasson told Icelandic media.
The main requirements for such a sale would be that the
legal entity buying property is domiciled in Iceland, directors
need to be Icelandic citizens and to have been permanent
residents for at least five years, the ministry said in a
The ministry said 80 percent of shares in the firm should be
held by Icelandic citizens. It stressed there were no precedents
for such a large area of land -- 0.3 percent of the country's
landmass -- being sold to a foreign entity.
The deal would have marked the first major Chinese
investment in Iceland, which is still recovering from the
collapse of its banks in 2008 during the global financial
crisis. It would have been the latest in a growing trend of
Chinese asset purchases in the West.
($1 = 120.3150 Iceland kronas)
(Additional reporting by Anna Ringstrom and Simon Johnson;
Editing by Sophie Hares)