Monday, March 11, 2013
Michael Coote: Will tribal risks be fully disclosed in Mighty River Power sale?Labels: asset sales, Maori tribes, Michael Coote, Mighty River Power, MOM
The Mighty River Power (MRP) share float is being rushed through by a National minority government anxious to score a public relations victory. For prime minister John Key, the float is his chief hope of leaving behind a political legacy to be remembered after he has claimed his exiting knighthood.
There will be tension between Mr Key, who would want to get the shares away come what may to help him win his gong, and finance minister Bill English, who should seek the highest possible price to pad out the government’s ailing books.
There will also be tensions between the Kiwi mums and dads with their pathetic $2,000 maximum share allocations, and institutions and foreigners who would want some serious shareholdings.
If the mums and dads hang on to their paltry and fragmented token allocations, they’ll easily be trampled over by larger stakeholders and relegated to futility.
If these same dupes sell into the stagging frenzy, then the IRD should rightfully claim its taxation dues without government interference in service of the cause of capitalist populism.
Of great interest will be how the government as vendor of the shares discloses truthfully the risks to MRP shareholders from legalised looting by Maori tribes.
The government has a legal and moral duty to disclose this Maori tribal risk factor clearly and honestly in the prospectus for MRP shares and deserves to be sued by adversely affected shareholders if it fails to do so.
From the outset, the mixed ownership model (MOM) of partially sold down state-owned energy enterprises was beset by smarty-pants general election tactics and irresponsible failure to ensure that public policy was internally coherent.
At the 2011 general election, the government proposed the selldown as an assumed easy win that would help balance its books, yet overlooked entirely the risks posed by the Maori water grab and its own frenetic garage sale of Treaty of Waitangi settlements under the hubristic sway of Christopher Finlayson.
The negligent incoherence and reckless lack of attention to detail of the government’s casually thrown together policies was brutally exposed when it was forced to amend its MOM enabling legislation with clause 45Q(1).
This clause states that, “Nothing in this Part shall permit the Crown to act in a manner that is inconsistent with the principles of the Treaty of Waitangi (Te Tiriti o Waitangi).”
Given that the government is bound to maintain at least a 51% equity interest in its partially-privatised energy assets, the score at this point is Maori 1, potential shareholders nil, because the government as majority shareholder will be hobbled by Treaty principle pandering.
To aggravate matters further, Mr English ran amok promising Maori tribes MOM shares on government credit to get them to support partial privatisation over the Maori Council’s litigious opposition.
No one believes that Maori tribes will ever repay their government loans advanced to buy the shares, and thus public assets are handed over to private interests gratis without ordinary New Zealanders being fairly compensated.
Maori tribal MOM shareholders plus the government with its Treaty-bound 51% minimum equity will always outvote all non-Maori shareholders in this pretty demonstration of Treaty partnership apartheid.
Maori 2, potential shareholders nil.
MRP’s electricity generating catchment is comprised of the Waikato river and its tributaries.
By sheer coincidence, we have Treaty settlement acts of Parliament rammed through by Mr Finlayson that privilege Maori tribal dwellers along these same rivers above all other human beings on planet Earth, including race-based grants of statutory powers equal to those of democratically elected local authorities.
Witness the Waikato-Tainui Raupatu Claims (Waikato River) Settlement Act 2010 and the Nga Wai o Maniapoto (Waipa River) Act 2012.
These Parliamentary acts have the potential to affect MRP shareholders and must be fully explained in the share prospectus with respect to their impacts and risks to other non-tribal investors.
Stung by criticism from Federated Farmers' Don Nicolson that Maori tribal co-governance over the Waikato river was flawed and undemocratic, Mr Finlayson wrote in 2010 that “This is not an issue of separatism.”
“The interests of the iwi here are the same as the interests of all New Zealanders - and that should not come as a surprise.”
Let’s just wait and see if Mr Finlayson’s self-serving optimism is justified once equity in MRP comes into play.
Odds on, we’ll be surprised and not in a pleasant way to discover that the Key government has handed MRP’s electricity generation over to Maori control.
From the outset, the government didn’t make certain its MOM float proposals were consistent with the runaway locomotive it let loose with its hasty Treaty settlements.
There’ll likely be tears before bedtime for the mum and dad MRP shareholders already savaged by dodgy finance company failures.
Maori 3, potential shareholders nil.
at 8:28 AM