Ex-Solid Energy boss asks media to leave
MICHAEL BERRY, CHARLIE GATES AND KATE CHAPMAN
Former Solid Energy boss Don Elder wants the media to leave him alone ahead of his appearance before the commerce select committee.
His lawyer, Peter Churchman said Elder would say nothing beyond last night's statement until Thursday's appearance at Parliament.
''It would be appreciated if media would respect the privacy of his family and decamp from his home. As noted in his earlier statement, he has always been willing and available to appear before the select committee. That is the proper place for him to answer questions at this time. Dr Elder appreciates that there is significant media interest in Solid Energy and that media can and will attend the select committee hearing on Thursday.''
Former chairman John Palmer this morning said he was also prepared to front at the committee.
In a statement issued through Churchman lat night, Elder said he would appear "pending approval from my employer".
"I have always been willing to answer any questions members of the committee may have about Solid Energy and my time as its chief executive.
"I made myself available to assist the Solid Energy team at last week's sitting of the committee, but was advised that I was not required to be present. I have never refused to co-operate.
"I will endeavour to help the committee in any way I can, subject to the lifting of obligations imposed on me by Solid Energy.
"I will be making no further public statements until the committee hearing," Elder said.
It is the first public statement Elder has made since the Government disclosed that the state-owned coal company he once headed was on the brink of insolvency. The present chief executive and chairman of the company appeared before the committe last week but committee members sought Elder's appearance to answer questions about his time in charge.
The Government has taken $130 million of dividends from the now debt-ridden Solid Energy since setting up shop in the Beehive four years ago.
During the previous eight years under the Labour government, the state-owned coalminer paid $64.4m to the Crown.
The Government has defended taking its cut, saying the miner was producing strong profits and it was up to the company's board to balance funding, dividends and spending.
Labour MP for the West Coast Damien: "National was prepared to rape and pillage the revenue of Solid Energy for short-term gain, completely disregarding the social consequences and the employment effects that would have."
Solid Energy has imploded in the past six months, stumbling from the weight of ballooning staff numbers, failed investments and a falling coal price.
The Government has said it started having concerns about Solid Energy's position in 2011, yet it accepted $50m in dividends that year. It had already been paid about $80m from 2009 and 2010.
The higher dividends coincided with the company's swelling debt, from $15m in 2008 to $100m two years later.
By June 2012 it had hit $295m. It now stands at $390m.
State-owned Enterprises Minister Tony Ryall said the Government had called on all state businesses to improve their performance and returns.
The coalminer was reporting record profits in 2008/09 on the back of high coal prices, he said.
"Solid Energy's dividend payments were low in relation to Solid Energy's operating cash flow and capital expenditure," he said.
The board had decided to borrow for its development programme and it was not up to ministers to authorise such decisions, he said.
A pre-asset-sale study in 2011 for the Government had highlighted over-optimistic coal price assumptions and questionable alternative fuels investments, which led ultimately to changes to the board and management, he said.
O'Connor said the previous government had supported Solid Energy as a sustainable business that was looking into alternative developments, while National saw it solely as a cash cow which could help it fund tax cuts.
"Clearly the National Government has mined the company with no long-term vision for its future other than the sell-down of half of the company," O'Connor said.
"It's classic National Party thinking, void of sustainability or social responsibility."
The lucrative profits offered by high coal prices were part of a cycle that meant a price fall was inevitable, and dividends should have been determined on that basis, he said.
Labour's state-owned enterprises spokesman, Clayton Cosgrove, said the Government called a meeting for SOE heads in early 2009 telling them to boost the returns to the Crown.
The businesses were run at arm's length from Government - a good thing - but that did not mean the Crown should act as a "dumb mute" shareholder, he said. The Government should have ensured the board and its management had a credible plan for dealing with the downturn.
Cosgrove said the committee was told last week that Elder would not front the committee and that now turned out to be false.
"Somebody's wrong, somebody is bordering, in my view, on misleading the Parliament, misleading the committee and that borders on contempt."
"All this does is provide further muck and further murk on this whole issue."
Cosgrove said he would like to see Elder and Palmer attend the select committee but felt more time was needed than the 45 minuted allocated.
Labour leader David Shearer said responsibility for the state of Solid Energy ultimately rested with the Government.
"These are taxpayer assets... they dropped the ball."
Now the Government was trying to blame Labour after more than four years in power.
There should be a ministerial or select committee inquiry to establish exactly who is at fault, he said.
"When they took over Solid Energy, Solid Energy was in a healthy state and now it's $389 million in the red."
- © Fairfax NZ News
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