Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Supreme Court decision opens way for privatisations

Supreme Court decision opens way for privatisations

By Pattrick Smellie

Feb. 27 (BusinessDesk) - The government will be racing the clock to try and sell up to 49 percent of state-owned electricity company MightyRiverPower now that the Supreme Court has dismissed attempts by Maori claimants to settle Treaty of Waitangi claims to freshwater rights first.

The unanimous decision of the five judge full bench of the Supreme Court clears the last legal hurdle to the MRP sale, which the government had hoped would be concluded before last Christmas.

However, whether it can meet its own timetable and get the MRP share float done ahead of the May 16 Budget remains to be seen. If delayed until after that date, MRP would have to restate its most recent six monthly accounts as they must be no older than 135 days to meet US securities regulations.

The involvement of US-based investment houses in the float is seen as important to ensuring it is well-supported, although no private shareholder will be allowed to hold more than 10 percent of MRP, while the government will retain a 51 percent controlling stake.

The sale may raise in the order of $1.5 billion and is a lynchpin of the government's economic strategy, despite attracting strong public disapproval. A petition to force a non-binding citizens' referendum is close to being lodged at Parliament, although there is no obligation to hold such a poll before the sale has occurred.

The Supreme Court gave Maori claimants a small bone by rejecting findings last year in the High Court that the Cabinet decision to sell a stake in MRP could not be judicially reviewed.

The High Court did have that power, Chief Justice Dame Sian Elias told a packed courtroom across the street from the parliamentary complex, where politicians of all stripes were waiting to hear the decision.

However, the court unanimously dismissed the appeal's fundamental premise that partially privatising a power company using water for hydro and geothermal power generation would "materially impair" the government's capacity to offer redress for Treaty breaches relating to freshwater rights.

"We are prepared to accept that privatisation may limit the scope to provide some forms of redress which are currently at least theoretically possible," said Elias. "But whether that amounts to 'material impairment', regard must be had to a) the assurances given by the Crown, b) the extent to which such options are substantially in prospect, c) the capacity of the Crown to provide equivalent and meaningful redress, and d) the proven willingness and ability of the Crown to provide such redress."

The court also found the urgent round of consultation undertaken by the government in the latter part of last year was adequate.

New Zealand Maori Council lawyer Donna Hall conceded outside the court the decision would allow asset sales to proceed, but important principles relating to appropriate consultation and redress had been confirmed.

Labour Party leader David Shearer said the government should cancel the sales anyway, given the depth of public opposition.

“Regardless of the Supreme Court decision, there is still a great deal of uncertainty around this plan," he said in a statement. "Compensation may have to be paid to iwi, the concern around Tiwai Point hangs over the electricity sector, Solid Energy has collapsed, electricity demand is predicted to remain flat so selling our energy companies at the bottom of the market is just foolish."

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: RBNZ Starts Talks On Tougher Rules For Property Speculators

The Reserve Bank of New Zealand is stepping up preparations to restrict lending to residential property investors as it watches house prices, particularly in Auckland, continue to rise strongly. More>>

ALSO:

Research: ‘Ageing Well’ Science Challenge Launched

Science and Innovation Minister Steven Joyce today launched the Ageing Well National Science Challenge, confirming initial funding of $14.6 million. More>>

ALSO:

Scoop Business: Govt Resisting Pressure To Pump More Cash Into Solid Energy

Prime Minister John Key says it is “not the government’s preferred option” to make a fresh capital injection into the troubled state-owned coal miner, Solid Energy, but dodged journalists’ questions at his weekly press conference on whether that might prove necessary... More>>

ALSO:

Lagest Ever Privacy Breach Award: NZCU Baywide Accepts “Severe” Censure In Cake Case

NZCU Baywide says that once it was found to have committed a breach of a former staff member’s privacy, it had attempted to resolve the matter... the censure and remedies for its actions taken almost three years ago are “severe” but accepted, and will hopefully draw a line under the matter. More>>

ALSO:

Scoop Business: PayPal Stops Processing Mega Payments; NZX Listing Still On

PayPal has ceased processing payments for Mega, the file storage and encryption firm looking to join the New Zealand stock market via a reverse listing of TRS Investments, amid claims it is not a legitimate cloud storage service. More>>

ALSO:

Housing Policy: Auckland Densification As Popular As Ebola, English Says

Finance Minister Bill English said calls by the Reserve Bank Governor for more densification in Auckland’s housing were “about as popular in parts of Auckland as Ebola” would be. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news