Solid Energy probe call rejected

23:32, Mar 14 2013

The head of the committee that grilled Solid Energy's former bosses says he is unconvinced a full inquiry is needed.

Opposition MPs are pressuring for a full inquiry into the collapse of the state-owned coalminer, which is now reliant on government support to manage its $389 million debt pile.

Commerce select committee chairman Jonathan Young allowed yesterday's appearance by former Solid Energy chairman John Palmer and former chief executive Don Elder to run for an hour longer than was originally expected.

Young, the National MP for New Plymouth, said this morning that he believed the committee now had "a very clear picture" of what had happened to Solid Energy, which was hit by falling coal prices, a strong New Zealand dollar and poor investment decisions.

In recent days it has emerged that the Government leaned on the company to take on more debt, after it warned it may pay less dividends.

Young said that "in hindsight we can look back and see if they didn't have debt they would be in a better situation".

Despite this, Young said he was yet to be convinced that a full select committee inquiry was needed into the collapse, saying there were "multiple levels of inquiry" already under way, with the company talking to its financiers, and the Government "looking at all of the issues".

He told TV3's Firstline: "I am personally yet to be convinced that we are going to uncover anything new or different that wouldn't be uncovered" anyway.

The committee would continue to discuss the issue and he understood some members were keen for the process to take place.

"We're not closed off to the idea".

Ged O'Connell, assistant national secretary for the EPMU, said the excuses put forward for the company's collapse were implausible and that Solid Energy had failed to build up a buffer during boom times.

"What is extraordinary about this is that they went on a spending spree" at the same time as they were borrowing money to pay debt, O'Connell said.

"In a volatile industry, that's not a plausible excuse. Over the last decade, 20 years, the [coal] prices have come and gone. Any prudent miner would have put away some funds for a rainy day. It was bound to happen."

Meanwhile, Prime Minister John Key is under pressure to explain his claim that Solid Energy had come to the Government asking for $1 billion for new projects.

"They wanted a very large capital injection in the order of $1b," Key said in February.

Grilled about the claim at yesterday's appearance, Solid Energy's Palmer, who last year stood down after six years, said he could not recall such a conversation. Instead, he recalled telling the Government he did not believe it was appropriate for the Government to be injecting funds.

Labour's state-owned enterprise spokesman Clayton Cosgrove said Key has questions to answer.

"The prime minister has just made it up and he's been found out," Cosgrove said. "He tried to create the impression he was some kind of white knight riding to the rescue of taxpayers by knocking back a Solid Energy bid for $1b capital injection. But that's now been exposed as just a fantasy in his own mind."


(Live Matches)