‘Shares plus’ – it simply does not add up

HIDESIGHT

Shares plus – plus what exactly? We don’t know.

Shares plus were asked for by the water rights claimants, endorsed by the Waitangi Tribunal, dissed by the prime minister and consulted on by the finance minister.

The claimants tossed the idea at the tribunal hearing on water, saying that shares in the power companies the government is part-selling down weren’t enough, but that “shares and some control of the companies is beginning to be a potential solution”. 

“Shares plus” is not the solution, not a “potential solution” but the “beginning” of a potential solution. That suggests “shares-plus” is not much of a solution at all.

Before the selldown
The tribunal summarised: “The NZ Maori Council seeks a remedy that preserves the ability of the Crown to provide ‘shares plus’ in partial recognition of Maori rights and as a partial remedy for Maori Treaty claims.”

So “shares-plus” is just a part remedy. It’s not enough on its own.

The tribunal further explained “shares plus” as “the provision of shares or special classes of shares which, in conjunction with amended company constitutions and shareholders’ agreements, could provide Maori with a meaningful form of commercial rights recognition.” 

The tribunal rightly recognised such a part remedy could not be achieved after the selldown of shares. It would have to be completed before.

Prime Minister John Key totally dissed the concept. “The government’s looked at it [shares plus] with its economic people and its legal advisers and thoroughly rejected it.”

That’s a definite no.

But the tribunal highlighted “shares plus” and the government consulting on the concept should help lessen the legal fallout as the case wearingly and inevitably makes its way to court. Hence, Finance Minister Bill English fronting up to iwi.

Now follow the argument. The tribunal concluded that because iwi and hapu sing songs about rivers and have spotted taniwha in them, they therefore have legitimate exclusive ownership of the nation’s waterways.

That in turn entitles them in part remedy to “shares plus” in power companies that rely on the fall of the water to drive their turbines. It’s a very thin bit of reasoning.

Extra rights for Maori
The government was elected on the clear platform of a partial selldown of the companies. Now the tribunal wants to encumber the sale with “shares plus”.

There will be two lots of shares trading, Maori shares and non-Maori shares. I assume the Maori shares will be tradeable.

The government will sell the non-Maori shares. That’s where it gathers up some much-needed cash.

The tribunal would have the government hand out the Maori shares as part of a beginning of a potential settlement on water rights.

The Maori shares give rights over and above the non-Maori shares. The extent of those rights have not been spelled out by the tribunal or claimants.

But the implication is that the holders of these shares will have extra control of the power companies that non-Maori shareholders don’t enjoy.

The questions are many and varied. How can the tribunal toss such ill-thought-through policy prescriptions that derail an elected government’s manifesto and retain any credibility?

How does the tribunal expect the concept of “shares plus” to be developed and implemented when the tribunal itself leaves the concept so vague and airy-fairy?

How exactly does the song-singing and taniwha-spotting link to corporate control of billion-dollar power companies?

Who would invest in a company where control is ceded to shareholders disproportionate to their holdings?

Why does the government and the taxpayer have to fund all sides of this nonsense?