Supreme Court given asset sale IPO deadline

Preparing Mighty River Power for public listing will not begin before February 18.

The Supreme Court has been told the date will be the final window of opportunity to start the partial sale process of the state-owned enterprise.

Chief Justice Dame Sian Elias and Justices John McGrath, William Young, Susan Glazebrook and Robert Chambers have reserved their decision after two days of hearing on water rights issues.

The Maori Council has been trying to halt the sale of up to 49% of Mighty River Power, which the government is planning for the first half of this year.

Queen’s Counsel David Goddard told the Supreme Court the Crown would not be undertaking any preparation or behind-the-scenes work on the sale process before February 18. This would give the Supreme Court a little over a fortnight to make a decision.

In closing arguments, Maori Council lawyer Colin Carruthers QC repeated his concern the government’s decision to sell shares to a third party would restrict its obligation to look out for Maori customary rights in the water resource.

He said those rights dated back to 1840, when the Treaty of Waitangi gave them full, exclusive and undisturbed recognition.

Mr Carruthers questioned Mr Goddard’s concern Maori had never made their claim clear. “What they want is a remedy or compensation if all else fails.”

Justice Chambers challenged Mr Carruthers on the water rights issue and said the dams were likely to stay in place beyond the life of the 35 year consents.

“It’s extremely unlikely the infrastructure would be closed unless we give up hydro-electric power. The use of the dams is likely to continue in some way or another."

Earlier in the day, Mr Goddard conceded any investment prospectus sent to investors would need to disclose the possibility of the 35-year consents not being renewed.

"There are downside contingencies and there are upside contingencies. The potential for regulation changes is one of those downsides."

But he assured the Supreme Court the sale proceeds are still on track to return between $5 and $7 billion to be reinvested in schools and hospitals, roads and rail.

He said the government does have the power to transfer the SOEs back from the mixed-ownership model structure if the share price was not suitable or the marketplace changed.

When that was questioned by Mr Carruthers, Chief Justice Elias said getting the largest amount of money was at the forefront for the government.

“Why isn’t the Treaty as important as the price you’ll get,” asked Mr Carruthers.

Yesterday, Mr Carruthers argued the transfer of shares will result in the impairment of the Crown's abilities. It would be unable to deal with river consent issues easily and would instead need to consult with the private shareholders.

“At present the Crown can exert considerable control over the state-owned enterprise but this control will significantly diminish once each SOE is turned into a MOM (mixed-ownership model) company.

"Giving Maori direct and meaningful involvement in the power-generating SOEs after privatisation will not be possible.”

After questioning Mr Carruthers, Chief Justice Elias floated the prospect of the Supreme Court limiting share sales to no more than 25% of the companies.

"A protective mechanism could be that the Crown will only divest 25% until there's some resolution.”

bcunningham@nbr.co.nz

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10 Comments & Questions

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Surely the chief justice's suggestion of limiting the divestment to 25% is outside the court's brief?

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It is clear from their Counsel's comments that Maori are simply seeking to get a financial rent by way of a shareholding in, or co-management of, the energy SOEs.

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The people of NZ are sick of this Maori cr*p. We all know they only want compensation. It's about time they did an honest day's work like the rest of the country. This treaty business has turned into a joke!

About time they positively contributed to society.

Take Take Take.

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I couldn't agree with you more. However the pendulum will swing the other way sooner or later. Many, many New Zealanders and there families have had crimes committed against them by Maori. The time will come for Maori to make reparation. And one things for sure it won't be cheap. As Iwi have taken it upon them selves to collect money on behalf of all Maori, a good place to start taking out court action will be against Iwi. The Treaty is not a one way street, they agreed to obey the laws of the land.

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People are sick of the pakeha 'sell everything cr@p' as well buddy, this wouldn't be happening if white t@3*sh wasn't trying to hock it off to the private school born to rule class, thus transferring more wealth from Mr and Mrs average to Mr & Mrs wealthy... that's the real outrage.

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You are the trash here you fool.

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this maori money grab rubbish needs to stop.

if anything shares should be retained on behalf of all NZ'ers and not just in maori interest, who have no useful interest in it other than extracting money from it to spend on their own interests.

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Hey Paul, my kids are Maori and go to private schools.

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Is the chief justice allowing her political colours to sway what should otherwise be an open and impartial approach to the issue?

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Paul's comments sum up the attitude a lot of white NZ'rs have of Maori in general.
I claim Maori heritage, and look forward as a NZ citizen to being able to invest in a quality share on the NZX, as do many others of similar background to myself.

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