Float SOE shares, urges MP

Last updated 00:20 06/09/2008

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A partial float of state-owned enterprise shares has been recommended by independent MP Gordon Copeland, the vice-chairman of Parliament's commerce committee.

It follows a highly critical report on the reporting and monitoring of Crown companies. The committee's report, published this week, called the lack of transparency and gaps in reporting "indefensible".

It prompted NZX chief executive Mark Weldon to call for the dumping of the Crown Company Monitoring Advisory Unit (CCMAU), which oversees the Government's investments in state-owned companies.

During the committee's inquiry into the valuations and reporting of the 18 SOEs, Mr Copeland argued unsuccessfully for 20 per cent of SOE shares to be listed, to ensure accountability of boards and executives under NZX regulations and let the market value them accurately.

SOEs' performances had suffered from successive governments installing "cronies" on their boards, he said. "And from what I hear there are people on those boards who are really not up to it."

In a 2006 survey of directors of the nine largest SOEs by Victoria University senior lecturer Richard Norman, directors expressed concern that the appointment process was too heavily weighted toward political acceptability rather than business acumen.

When the committee report was published on Thursday, Mr Weldon offered the Government free listings for 5 per cent of SOE shares to lift transparency and accountability.

A 20 per cent float would be a sensible proportion of shares to list, and "then no one can accuse either Labour or National of selling the family silver".

Mr Copeland, a former chief financial officer of BP New Zealand and former director of the New Zealand Refining Company, said the main political parties had traditionally taken polarised stances on SOEs, either advocating 100 per cent sale of shares or full public ownership.

National has vowed not to sell off Crown companies in its first term.

Data usually in the SOE portfolio's annual intent statements, prepared by CCMAU and Treasury, was absent in 2007 and 2008 apparently because of a lack of resources.

The Kiwi Party, for which Mr Copeland will stand at the next election, advocates floating 20 per cent of SOE shares, to release about $5 billion for infrastructure.

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- © Fairfax NZ News

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