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Watercare Director invalidated by technicality

Appointment of Watercare Director invalidated by legal technicality

The chairperson of Watercare’s Shareholders’ Representative Group (SRG), Auckland City Councillor Dr Bruce Hucker, announced today that Mr Gary Taylor’s appointment as a director of Watercare has been invalidated due to a legal technicality.

Dr Hucker says Watercare has been advised that Mr Taylor was not eligible to be appointed a director of Watercare because he was also a member of Infrastructure Auckland. This is contrary to the Local Government Act 1974 which states that no director of Watercare may be a person who is also an elected member of any local authority. According to the Local Government Act 1974, a member of Infrastructure Auckland is considered to be an elected member of a local authority. It is also contrary to Watercare’s constitution.

Mr Taylor was appointed by the Shareholders Representative Group as a director of Watercare on 1 March 2001. He was appointed a member of Infrastructure Auckland on 1 January 2000 and was reappointed for a two-year term with effect from 1 July 2001.

“It is with sincere regret that the SRG has informed Mr Taylor that he is not eligible to be a director of Watercare. Needless to say Mr Taylor has accepted that he cannot remain on the board.

“Mr Taylor has made an excellent contribution to the board and it is most disappointing and regrettable that a due to a legal technicality his appointment is invalid.”

Dr Hucker said the SRG has received legal advice that Mr Taylor’s appointment as a director of Watercare when he was ineligible for appointment does not invalidate Mr Taylor’s acts as a director.

“In view of this, and because Mr Taylor’s professional skills and experience have added considerable value to the board of Watercare since his appointment, Watercare is unlikely to seek recovery of payments made to Mr Taylor as director’s fees.

Infrastructure Auckland is not a local authority as defined in the Local Government Act. It is, however, deemed to be a local authority for the purposes of certain provisions in the Local Government Act and a number of other acts.

The legislation appears to have been designed to prevent members of local councils who jointly own Watercare and are its customers from being on the board.

“The SRG does not believe there is any conflict of interest in being a member of Infrastructure Auckland and a director of Watercare. We will, therefore, ask the government to make the legislative amendments to allow this.

Watercare’s constitution requires the company to have a minimum of two, and allows a maximum of eight, directors. As the company currently has seven directors (excluding Mr Taylor), there is no need at this time to appoint a replacement director.

If the legislation is corrected, the SRG would then consider reappointing Mr Taylor to the Watercare board.

Watercare Services Ltd is New Zealand’s largest water and wastewater industry company. It is jointly owned by the city and district councils of Auckland, Manukau, North Shore, Papakura, Rodney and Waitakere. The Shareholders’ Representative Group represents Watercare Services Ltd’s six local authority shareholders and appoints an independent board to govern the company.

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