In a surprise announcement, experienced Mighty River Power director Jon Hartley is stepping down from the state-owned company board, just weeks before a potential partial sale of the company.
Mighty River's full-year results are due on February 21 and Hartley officially steps down the day before that announcement.
Mighty River is expected to be partly sold by the Government by the middle of the year, pending a court case about water rights.
Under the mixed-ownership model, the Government will sell a 49 per cent stake in Mighty River, the country's fourth- biggest power producer, at some point between March and June.
The IPO is subject to a challenge in the Supreme Court, with the Maori Council looking to overturn a High Court ruling that dismissed its bid to halt the sale of state assets. Should the Maori challenge fail, the Government is expected also to try to float either Meridian Energy or Genesis Energy before the end of the year.
Hartley has been a director of Mighty River since the end of 2009. The Government as shareholder did not immediately announce a replacement for him.
Industry sources said any new director would face a huge amount of work to get up to speed on the company before its prospectus was signed off.
The source said Hartley was pretty busy with international aid work, but was surprised he had stepped down after just three years on the board.
Hartley said that the decision to stand down had been difficult, "brought about by the revised timing of the proposed initial public offering, creating significant workload clashes" with his other long-standing commitments.
"Unfortunately, I have commitments to a number of self-funded overseas engagements with World Vision International and its micro-finance subsidiary VisionFund International, of which I am vice-chair."
Hartley is also a deputy chairman of ASB Bank and ASB Life and a non- executive director of the Chorus board.
His past roles include chairing SkyCity Ltd, chief executive of Brierley NZ and Solid Energy and chief financial officer of Lend Lease in Australia. His CV on the Mighty River and Chorus websites make no mention that he was also chairman of former listed company Vertex, seen as a disastrous private equity float in 2002. Vertex issued a profit warning just two months after floating and its share price slumped to almost half the listing price.
In 2003, the Securities Commission found the Vertex prospectus was likely to mislead because it did not have "ifs, buts and maybes" in the fine print.
But the commission cleared the promoters and directors of knowing the prospectus was misleading at the time of the share allotment, and took no further action. Hartley resigned from the Vertex board a week after the commission report was issued.
The senior industry source said Hartley's role at Vertex would not have counted against him in the public float of Mighty River.
- © Fairfax NZ News
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