Opponents to the partial sale of a few state assets are delighted the partial float of Mighty River Power has been delayed.
But delay means just that. It doesn’t mean the share sale or the policy have been ditched.
The Government will proceed with an initial public offering of up to 49 per cent of Mighty River Power in the period of March to June 2013, Prime Minister John Key says.
That would be followed in the latter part of the year by an IPO of up to 49 per cent in either Meridian or Genesis.
“The Government’s preference would have been for a share offer for Mighty River Power this year.
“However, after careful consideration ministers have decided to undertake a short period of consultation with iwi on the ‘shares plus’ concept raised in the Waitangi Tribunal’s interim report.
Consultation shouldn’t be taken to be capitulation.
In essence, ‘shares plus’ refers to the idea that certain Maori interests would be given particular rights and powers in relation to the company, above and beyond the rights of other shareholders.
Mr Key says that after careful consideration and discussion, the Government’s current view is that this idea should not be progressed. There are five main reasons for this view:
- It is not in the national interest for any group within Mighty River Power’s potential 49 per cent minority shareholding to be given such rights.
- Almost every form of redress to Maori that could be covered by ‘shares plus’ can be achieved in other ways.
- The remaining elements of ‘shares plus’ in relation to decision rights over management or strategic decisions would not be able to work in practice. To take one example, if some Maori shareholders had the ability to make decisions on strategic issues, under well-established law, those shareholders must act in the interests of the whole company and not simply as a representative of Maori.
- If the ‘shares plus’ concept existed it was likely to make the company less attractive to investors, which could be reflected in a lower sale price and therefore be to the detriment of taxpayers.
- Following consultation with iwi earlier this year, a careful and deliberate decision was made to ensure that the Crown’s obligations under the Treaty continue to rest with the Crown, not with the companies.
This is an area where commercial law rather than politics must prevail.
That means all shareholders must be equal and none can be more equal than others.