No 'shares plus' scheme in asset sales

JOHN HARTEVELT
Last updated 15:47 15/10/2012
Fairfax NZ

Legal action could be taken by the Maori Council after the Government tossed out a proposal for "shares plus" in its partial asset sales programme.

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The Government is preparing for legal action by the Maori Council after tossing out a proposal for "shares plus" in its partial asset sales programme.

Prime Minister John Key today said a proposal for ''shares plus'' would not be picked up by the Government when Mighty River Power was partially sold down in the second quarter of next year. Cabinet had today decided that, after a consultation period was completed, negotiations on the idea were now closed, Key said.

Those decisions ''may lead to legal action from the Maori Council and others'', he said.

"That's entirely a matter for them. From the Government's perspective, it would not be unexpected.''

The Government had planned to float 49 per cent of Mighty River Power in the third quarter of this year but the sale was put on hold after a Waitangi Tribunal report recommended a delay.

The tribunal suggested that consideration be given to issuing special shares in the company to Maori with a specific interest in the water used by power companies.

"Shares plus" would give Maori additional rights not available to other shareholders when the state-owned energy companies were partially sold.

A series of hui around the country to discuss the idea were generally not well-attended, with some blaming the Government's clear view beforehand that it did not support the idea.

Key said after the consultation period, no new information had emerged that would change the Government's preliminary view that the concept of ''shares plus'' should not be progressed.

Maori did have rights and interests in water, which would be addressed through a range of processes like Treaty settlements and dialogue with iwi leaders, he said.

"The partial sale of Mighty River Power does not impact on the Crown's ability to recognise Maori rights and interests in water,'' Key said.

Appointing directors and exercising shareholder voting rights could be achieved in other ways with the Crown, which would remain the controlling shareholder.

"The Crown does not believe that providing iwi with special rights in making management decisions will work well and most submitters who considered the idea agreed,'' Key said.

"'Shares plus' would create a potential conflict of interest within and between different iwi groups. And it would potentially weaken existing relationships between iwi groups and the SOEs.''

Early next year Mighty River Power would prepare its financial statements for the six months to the end of this year. It would take two months for those statements to be audited, leading to a sale of up to 49 per cent of the shares in the SOE between March and June, subject to market conditions.

An order in council approving the removal of Mighty River Power from the SOE Act would be ready by next Tuesday.

Before the float got under way next year, New Zealanders would be able to register their interest in purchasing shares.

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