Kerikeri-based spiritual leader Ilchi Lee ordered to pay $1.24m for property breaches

A Korean businessman and spiritual leader has to pay $1.2 million in court-ordered penalties after a $10m property-buying spree in the Bay of Islands was found to have broken the law.

Kerikeri-based Seung Heun Lee, known to his followers as Ilchi Lee, has been hit with the hefty penalty even though the Overseas Investment Office (OIO) found his breaches of rules for foreign buyers were “inadvertent”.

Lee bought the properties in Kerikeri, Whangaroa, Haruru and Pungaere Rd on the edge of Puketi Forest in 2014-16 for a total of $10.4m.

He’s now a permanent New Zealand resident but at the time was classed as an ”overseas person” and needed approval from the OIO to buy the properties.

Lee will be allowed to keep the properties, and the OIO accepted Lee and his businesses had made a significant contribution to the Far North.

It’s a contribution praised by Far North Mayor John Carter as “significant” who told the Advocate he hoped there was a way for the penalty to be directed towards the Far North’s benefit.

Yesterday’s ruling ends years of uncertainty for Lee, who said he was delighted to have reached a settlement with the OIO and was relieved the legal process was finally over.

”We can now focus on my businesses which are contributing much needed jobs and development to the Northland and New Zealand economy … I always said that any mistakes made when purchasing these were inadvertent on my part and due to poor legal advice,” Lee said.

”I’m glad the judge has backed this up in his judgment, as well the OIO and the judge acknowledging the significant economic benefits my investments have brought to Northland.”

Lee said he remained committed to the region.

In his ruling in Wellington High Court, Justice Matthew Muir said the combined penalties of $1,246,625 — which apply to Lee and his companies Double Pine Investment and Meditation Tour — reflected the significant value of the land and market valuation gains on two of the properties.

Lee was also ordered to pay $30,000 in legal costs.

Justice Muir said the properties’ area, natural significance, price and commercial purpose should have raised red flags for any professional organisation representing Lee’s interests.

Lee had co-operated with the OIO and told investigators he did not know he needed consent. His lack of English meant he didn’t fully understand the sale documents he signed.

Carter, who has served three terms as Mayor, said the penalties were ”unfortunate”.

”He’s a genuine fellow. His interest is in helping us get ahead. Obviously we all have to comply with the law but that’s a fairly big barrier. His commitment to the North already is significant and will continue to be.

”If there has to be penalty let’s hope the authorities can see their way to ensuring that Northland benefits from it.”

Asked about instances early in Lee’s time in the Far North in which some had treated him as a walking ATM, Carter said that too was ”most unfortunate”.

Lee had operated successful ventures overseas and wanted to do the same in New Zealand, Carter said.

In the agreed facts of the case, the OIO said Lee’s businesses had a positive impact on the tourism sector and the local economy through job creation and opportunities for local businesses.

Those businesses had benefited from more than 1000 extra tourists per year, many of whom visited during the off season.

Lee and his companies had also engaged constructively with iwi and hapū.

OIO group manager Anna Wilson-Farrell said it was an example of the consequences overseas investors face for not seeking specialist advice before investing in New Zealand.

“It is a privilege to invest in New Zealand, and overseas investors will continue to be held to account if they don’t comply with the rules.”

Lee has a worldwide following as the founder of Dahn Hak yoga, a learning technique he calls Brain and Body education, and more recently the Earth Citizen Organisation (ECO).

He has written best-selling books, courted controversy in the US, and owns retreats around the world modelled on a resort he founded in Sedona, Arizona.

One of his more unusual teachings is ”belly-button healing” in which followers use a yellow wand to stimulate the navel, apparently promoting gut and brain health along with energy and pain relief. Medical professionals are sceptical.

Lee first visited New Zealand in 2014 and decided to establish a base in the Bay of Islands after being amazed by the area’s ”purity and peacefulness”.

He also owns the former Haruru Falls Panorama Resort, some top-end residential properties in Kerikeri, and a 25ha property next to Whangaroa Harbour. More recently he has bought a kiwifruit orchard near Kerikeri.

In some cases people who have breached the Overseas Investment Act have been forced to sell the properties.

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